The Singaporean economy is expected to grow this year despite the potential of a US-Chinese trade war, according to the Monetary Authority of SingaporeMonetary Authority of Singapore (MAS) in its biannual macroeconomic review.
Growth would come from trade in areas like electronics amid sustained global demand.
Memory chip-makers and other parts of the semiconductor sector were especially well-positioned for growth, according to MAS.
A strong labour market and consumer spending would also boost growth, the report said.
Due to strong industrial links ties between Singapore and China, US tariffs on Chinese exports might hit the Lion City’s GDP, it said, while adding that the impact was likely to be limited.
“The direct impact from tariff actions announced thus far should be limited [but] a loss of confidence could quickly dampen economic growth and pose some downside risk to Singapore’s economic growth outlook.”
The central bank forecast this year’s GDP to be slightly above the middle of the forecast range of 1.5 per cent to 3.5 per cent, unchanged from its monetary policy announcement earlier this month.
MAS repeated its view that inflation would remain in the upper half of the 1 per cent to 2 per cent forecast range during 2018. Wage growth should pick up as the labour market continued to recover, allowing for 3.5-per-cent growth in wages after 3 per cent in 2017, the finance chiefs said.
Singapore’s Intellectual Property Office has announced an initiative to expedite the patent-granting process for fintech-related apps like blockchain-based payments.
A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Blockchain was invented in 2008 for use in the cryptocurrency bitcoin, as its public transaction ledger.
It said the FinTech Fast Track programme hoped to shorten the process from about two years to around six months.
In defining how an application can fall under the fintech category, the office said a technology that used blockchain to ease banking payments would be eligible.
The office’s statement said: “The incorporation of blockchain technology to improve the security and efficiency of clearing and settlement across borders for transaction and payment is deemed as an invention.”
Currently, MAS leads a cross-border payment system built on a blockchain platform called Project Ubin, in partnership with the Canadian central bank.
An April initiative by the Singapore authorities opened a blockchain competition with government funding to reward successful blockchain startups.
Singapore’s export-driven economy is susceptible to a trade war. Picture credit: Wikimedia