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SINGAPORE: There is currently no need to revise the government's growth forecast for this year, according to Finance Minister Tharman Shanmugaratnam who was speaking to reporters on the sidelines of an Inland Revenue Authority event on Friday.
Recent data shows that Singapore's industrial output came in weaker than expected for July, falling by 22 per cent on-year. This has sent some private sector economists to the drawing board.
CIMB-GK, for example, cut its full-year forecast for Singapore to 3.5 per cent, while OCBC trimmed its target to 3.3 per cent – both below the government's estimate of between 4 and 5 per cent.
But the finance minister said there is no need for the government to downgrade its own forecast just yet.
Mr Tharman said: "There's a range of forecast among the private economists. The consensus forecast is actually rather close to the government's forecast, both for growth as well as for inflation."
He acknowledged that July inflation number was slightly higher than expected at 6.5 per cent. But he noted that inflation has actually been easing since April.
This will be evident if one stripped out the owner-occupied component of housing costs that has given added lift to the Consumer Price Index. Nonetheless, the finance minister said the government would evaluate its full-year inflation forecast if commodity prices rebound.
He said: "We think in the second half of the year, it should ease further. A lot depends on oil and other commodity prices, of course. If that comes back up, we'd have to re-look at the forecast.
"But for now, we still expect an easing towards the end of the year, and we're already seeing it, even in the July numbers," said Mr Tharman.
The government is expecting inflation for the year to be between 6 and 7 per cent.
- CNA/so
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