IMF lowers Singapore’s 2019 economic growth outlook

In May, the IMF predicted 2.3% growth for Singapore in 2019, down from 3.2% in 2018. (AFP pic)

NEW YORK: The International Monetary Fund sees Singapore’s economic growth slowing to 2% in 2019 as global trade tensions hurt external demand.

Growth will probably stabilise in the “medium-term” around 2.5%, the Washington-based lender said in a statement.

In May, the IMF predicted 2.3% growth for Singapore in 2019, down from 3.2% in 2018.

IMF directors supported “broadly neutral monetary policy stance” and recommended it remain “data-dependent”.

If downside risks materialise, fiscal policy should be the first line of defence, IMF says.

Singapore’s financial system is resilient, “underpinned by a strong regulatory and supervisory framework,” it said.

The IMF added that liquidity stress tests reveal a vulnerability in US dollar liquidity and IMF directors encouraged giving priority to bolstering banks’ foreign exchange liquidity.

The IMF commended Singapore’s use of macroprudential and other measures in the property market.

It suggested “eliminating residency-based differentiation for the Additional Buyer’s Stamp Duty, and then phasing out the measure once systemic risks dissipate”

In a separate statement, the Monetary Authority of Singapore said it’s reviewing the IMF’s recommendations and will take appropriate steps to strengthen financial oversight.