by Cheryl Tay
Economic growth in Asia will likely pick up in the second quarter, as Europe recovers from its worst debt crisis, according to a senior economist at Dutch ING Bank.
In Singapore, economic growth will pick up at the end of the year, expanding 2.7 percent, at the higher end of the one to three percent official forecast, said Tim Condon, the bank’s chief economist for Asia.
However, he warned that the country’s inflation rate may accelerate at a faster pace if it is not restricted at a reasonable rate.
Following the 5.2 percent increase in the consumer price index in March, Condon said he is worried that the constant high inflation rate could disrupt price stability and change people’s expectations. He added that this could lead to higher inflation than usual.
Condon was also unsure on the question of whether the Monetary Authority of Singapore (MAS) should use interest rates as its monetary policy tool rather than the current exchange rate policy.
“I would hesitate to give advice to the MAS as this is a central bank that has really delivered the goods. I think they are really putting their head on the issue,” he said.
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