Chen Lin and Aradhana Ravindan

SINGAPORE (Reuters] – Singapore’s economic growth is forecast to be around 7% by 2021. That figure represents the maximum of the officially projected range. The government stated Wednesday that the economy would expand slower next year because there has been an uneven recovery.

According to the Ministry of Trade and Industry, GDP grew 7.1% in the third quarter compared with 6.5% in government’s advanced estimate.

A Reuters poll found that analysts expected a 6.5% growth.

It is predicted that the economy will expand by 3 to 5% in 2019. MTI forecasted a range between 6% to 7.7% GDP growth for 2021.

Gabriel Lim (permanent secretary for trade, industry and commerce) stated that the recovery of different economic sectors is not expected to be uneven by 2022.

He predicts strong outward-oriented sector like manufacturing and wholesale trading, and activity in the aviation and tourism sectors will remain at or below levels pre-COVID through 2022.

Quarter-on-quarter, seasonally adjusted data showed that the economy grew 1.3% in third quarter.

This small, open-minded economy has vaccinated approximately 85% of its population. It has also relaxed COVID-19 safety precautions this week, and opened quarantine-free travel routes with many countries.

According to the MTI, prolonged supply disruptions and a stronger demand pickup could cause persistent inflation.

While external inflationary pressures will likely remain high, wage growth should be stronger as the national labour market recovers.

Policymakers around the globe have focused their attention on inflationary risks associated with supply restrictions and recovery of the global economy.

In a surprising move, Singapore’s central banking had increased its monetary policy during its October meeting.

This week’s data showed that Singapore’s price index rose at the fastest rate in almost three years, in October. It was mainly due to higher food and services inflation.

Edward Robinson, MAS deputy manager, said that the Monetary Authority of Singapore will closely monitor inflation dynamics and be vigilant about price changes when it makes its next policy decision. This is expected to happen in April.

Singapore maintained its prediction for headline inflation at around 2% in this year’s estimate, with an average of 1.5-2.5% by 2022.