Slow but strong in 2008

The World Bank forecasts a slight slowdown for the Singapore economy this year.

Speaking to Today during the launch of the World Bank’s 2008 Global Economic Prospects Report yesterday, Mr Hans Timmer (picture), lead economist and manager of the Global Trends team in the World Bank’s Development Prospects group, said: “The outlook for Singapore is still very strong performance. Not as strong as 2007 where you had 7.5-per-cent growth. We expect growth to come down just below 7 per cent – that’s still very strong. Singapore benefits from its location, and from the extraordinary dynamics in Asia which show continued double-digit export growth.”

However he warned that the domestic property sector is “close to overheating”.

“What you’re seeing is that the export growth was very strong for a couple of years. It’s generating more and more income growth within the country as a result of which there is a tightness in the housing sector – it shows in the prices and in the building activity,” Mr Timmer added.

The World Bank also expects high commodity prices, especially the current spikes in oil prices, to gradually decline as the prevailing rate of high prices starts to slow down growth.

“We see the current situation as a volatile environment at high levels and that the fundamentals in the medium run will somewhat moderate in the long run,” said Mr Timmer, who co-authored the World Bank report.

The World Bank has faced some criticism in its latest report, on its forecast that developing countries will be largely resilient to a looming US slowdown.

Mr Timmer said: “The strong performance in developing countries is because they’re integrating into the global markets, they are creating stronger links with the high-income countries, so we are not talking about a decoupling… They are generating their own dynamics and they are determining what is happening in international markets.”

Source : Today – 10 Jan 2008

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