The Monetary Authority of Singapore on Wednesday said inflation is set to range between 4 and 4.5 percent in 2012, up from the prior forecast of 3.5 percent to 4.5 percent.
The central bank retained its growth forecast of 1 percent to 3 percent for 2012. The estimate is based on assumptions that there is no recession in the U.S., no significant escalation of the euro zone crisis and no hard landing in China.
However, economic growth could fall below 1 percent this year if downside risks from external environment worsen, MAS Managing director Ravi Menon warned.
The city-state economy grew about 4.2 percent in the first half of 2012.
In the annual report, the MAS said it did not transferred profits to the government in the financial year ended March 31, which boosted reserves and capital. The central bank logged a net profit of S$2.77 billion after reporting a loss of S$10.9 billion in the previous financial year.
by RTT Staff Writer
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