Test 2012 forecast: Economy could do better than expected

Test 2012 forecast: Economy could do better than expected

Singapore's economy may grow more than previously estimated this year, spurring inflationary pressures, a Monetary Authority of Singapore (MAS) survey of economists showed.

Gross domestic product may increase 3 per cent this year, compared with last quarter's survey for a 2.5 per cent gain, according to the median estimate of 21 economists and analysts, in a survey by MAS released yesterday.

Consumer prices may rise 4.2 per cent this year, they predicted, higher than the 3.5 per cent rate forecast in March.

Singapore said in April it will allow faster gains in its currency to dampen price pressures, diverging from most other Asian central banks that had left borrowing costs unchanged or eased monetary policy.

The economy grew faster than initially estimated last quarter, and the Government said last month that momentum had picked up, even as downside risks persist.

"We continue to expect decent overall growth in Singapore" once the United States and China regain some momentum in the second half, said Mr Vincent Conti, a Singapore-based analyst at ANZ, in a report on Tuesday.

GDP may increase 2.8 per cent this quarter from a year earlier, compared with 1.6 per cent growth in the three months ended March, economists in the MAS survey predicted.

The Government forecasts GDP growth of 1 per cent to 3 per cent this year. The economy may expand 4.5 per cent next year, the economists said.

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