SINGAPORE, July 25 — Singapore will be reviewing its full year growth forecast as the Republic’s sluggish economic performance will continue into the second half of this year, Ravi Menon, managing director for the Monetary Authority of Singapore (MAS) said today at the central bank’s annual report briefing.

Headline inflation, meanwhile, will likely climb out of negative territory while core inflation is expected to gradually pick up, he added.

"Singapore’s economic growth remains sluggish. Real Gross Domestic Product growth came in at 0.8 per cent in the second quarter on a quarter-on-quarter seasonally adjusted basis. Growth in the first half of this year has averaged 2.2 per cent in year-on-year terms. The economic performance for the second half of this year will not be too different from the first half of the year,” Menon said.

He added that the Ministry of Trade and Industry and MAS will be reviewing the Republic’s 2016 full-year growth forecast of 1-3 per cent, and said that more details will be given in due course.

Menon added that the global economy is headed for another year of lacklustre growth and the MAS will be closely watching three global factors that are key to growth outcomes for this year: Brexit and its implications, the shape of the recovery of the US economy and the slowdown in the Chinese economy.

The Republic’s performance dipped in 2015. Singapore’s economic growth real GDP expanded by 2.0 per cent in 2015, compared to 3.3 per cent a year earlier. The slower growth momentum was broad-based amid a synchronised downshift in Chinese and regional economies. At the start of this year, the Republic’s growth momentum eased further, with the first quarter expanding 0.2 per cent on a quarter-on-quarter seasonally-adjusted annualised basis, after the 6.2 per cent expansion the preceding quarter.

Core inflation, which excludes the costs of accommodation and private road transport, is expected to gradually pick up over the course of this year, reflecting the diminishing drag from oil prices as well as from budgetary measures, Menon said. However, he added that the pace of increase will be restrained, reflecting the weaker external price outlook, a reduced tightness in the labour market and a more muted pass-through of business costs to consumer prices. For this year, core inflation will likely average around 1.0 per cent and trend towards its historical average of close to 2.0 per cent over the course of next year.

The rising core inflation is recently a closely watched indicator by economists as it reflects items that puts cost pressures more on low income groups. Likewise, headline inflation is expected to climb out of negative territory and move towards 1.0 per cent next year. In 2015, headline and core inflation moderated to -0.5 per cent and 0.5 per cent, compared to 1.0 per cent and 1.9 per cent the preceding year. — TODAY