Business

IMF cuts Singapore economic growth forecast to 2%

The International Monetary Fund (IMF) has trimmed its 2019 economic growth forecast for Singapore to 2 per cent from 2.3 per cent, it said yesterday, as global trade tensions hit exports from the Republic.

Singapore's economy grew just 0.1 per cent in the second quarter, its slowest annual pace in a decade.

"Given global trade tensions, support from external sectors is expected to fall and growth drivers are projected to shift back to domestic demand," the IMF said.

"Risks to the outlook are tilted to the downside and mainly stem from external sources, including a tightening of global financial conditions, escalation of sustained trade tensions, and deceleration of global growth."

Singapore's economic growth should stabilise around 2.5 per cent over the medium term, the IMF said, adding its forecasts were based on discussions with Singaporean officials.

Singapore's central bank forecasts growth this year to be between 1.5 per cent and 2.5 per cent, down from 3.2 per cent last year.

In a separate development, the IMF has reaffirmed Singapore's financial sector oversight to be "among the best globally", while adding the country's economic fundamentals are strong and its economic policies sound.

Having completed its third financial sector assessment programme on Singapore since its last review in 2013, IMF said overall the sector is resilient with healthy buffers to withstand severe adverse shocks, the Monetary Authority of Singapore announced in a media release yesterday.

IMF found Singapore's financial system to be resilient even under very adverse scenarios. Singapore, along with 28 other jurisdictions, was assessed by IMF to be a systemically-important financial centre. - REUTERS

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