IMF expects Singapore economy to grow 2.5% next year

Posted: 01 September 2009 1345 hrs

SINGAPORE: The International Monetary Fund (IMF) is projecting that Singapore's economy would grow 2.5 percent next year.

This was unveiled in its latest report following a recent consultation with Singapore.

IMF also describes Singapore's policy response to its worst recession since independence as being "forceful".

Such policy measures include a large fiscal stimulus, an easing of monetary policy and moves to stabilize the financial sector.

IMF notes that the "skilful implementation of a broad range of policy instruments has helped lessen the impact of the shocks".

It also considers monetary policy settings to be broadly appropriate, supporting domestic demand without undermining exchange rate stability.

On Singapore's financial sector, IMF says the industry "has shown remarkable resilience". It expects the sector to be able to withstand an even deeper and more prolonged global downturn.

Going forward, IMF says priority should continue to be given to rigorous stress-testing as asset quality is likely to deteriorate.

- CNA/ir