http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200908312038dowjonesdjonline000362&title=imfsingapore-severely-hurt-by-crisis;09-gdp-may-fall-8%
Nasdaq, 31 Aug 2009
SINGAPORE -(Dow Jones)- The
International Monetary Fund Tuesday said that Singapore's economy
is likely to shrink by about 8% this year as the
global economic crisis has pushed the export dependent nation into
its worst economic downturn since the 1965.
In its report, after talks with Singapore authorities in May, the
IMF said that Singapore's economy is expected to pick up modestly
in 2010 as the global economy recovers and that Singapore's gross
domestic product will rise by 2.5% that year.
The IMF's assessment of
Singapore's GDP for 2009 is worse than the government's estimate of
a 4% to 6% contraction.
The IMF said that Singapore's monetary policy remains "appropriate"
and that it "should stay the course" until a recovery is well
established.
The central bank uses the exchange rate rather than interest rates
as its policy tool to maintain price stability and support growth
due to the economy's big reliance on overseas demand for
growth.
"There was agreement that, once a recovery is well established, a
return to a trend appreciation for the nominal effective exchange
rate would safeguard price stability as slack in the economy is
taken up," the IMF said.
It also aid that "inflation would fall to about zero in 2009, on
the back of lower food and energy prices and a widening output
gap."
-By P.R. Venkat and Costas Paris, Dow Jones Newswires;
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