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A nation connecting with the Western world, Singapore is said to be growing strong despite the recent moves from the U.S. Federal Reserve. With the rate cuts of close to 50 bps and many more to follow, are said to gain in the process, though the results for the same, would take time to bear fruits. The issue of inflation remaining sticky remains in many parts of the globe. Stringent central bank moves continue to be the foothold for most economies to hang on by the thread, despite fluctuations made by major central banks of the globe.
With the announcement of the rate cuts, the Monetary Authority of Singapore (MAS) maintained its tight monetary position, considering the inflation remained sticky. The Singapore dollar is said to have grown stronger with the rate cut announcement from the U.S. Fed, and it has boosted confidence among many investors from across the globe to come forward- showing to the world that their market is resilient to the market forces.
Performance since Q2 of 2024
The economy is said to have grown significantly in the second quarter of 2024, with a growth of 2.9 percent. It is a significant 0.4 percent growth from the last quarter. With this kind of growth trajectory, their growth for the end year is said to have been between 2.0-3.0 percent compared to that of 1.0-3.0 percent, projected at the beginning of the year. The unemployment rate (SA) is at 2.0 percent which is higher by 0.1 percent compared to Q1 of 2024.
Singapore’s economic growth is said to have improved, specifically in the manufacturing sector. It is driven by higher electronic goods production as well as biomedicals. This is a massive improvement considering the growth in the second quarter of 2021. It does reflect that the Purchasing Managers Index is said to have improved to 51.0 points (September) compared to August which was at 50.9 points.
Inflation situation and the way forward
Though the inflation has remained sticky, their central bank believes that the path taken is the right one to bring their inflation back to target. The nation’s core inflation remains elevated at 2.7 percent which is relatively higher. The action forward would most likely be on hold and ease likely at the beginning of 2025, which will help to meet their target of inflation of both core and headline at 2 percent as per reports from major banks.