CONTENTS
HOME
OUR WORK - Managing Risks, Sustaining Growth
A MORE CHALLENGING POLICY ENVIRONMENT
MONETARY POLICY - PROVIDING AN ANCHOR FOR PRICE STABILITY OVER THE MEDIUM-TERM
MANAGING THE CHALLENGES OF INCREASED GLOBAL FINANCIAL UNCERTAINTY
A SOUND AND PROGRESSIVE FINANCIAL CENTRE
CURRENCY
 
A MORE CHALLENGING POLICY ENVIRONMENT 12
 
Slowing in the G3 Economies 12
 
Asia Remains Resilient 13
 
Inflation Is On The Rise Globally 13
 
Singapore Is Not Immune To Global Growth and Inflation Risks 14
 

Asia Remains Resilient

Despite the less favourable global environment, growth in the rest of Asia has remained relatively firm thus far, supported by continued expansion in domestic demand and generally healthy financial institutions, which have not been significantly affected by problems arising from the US subprime mortgage sector.

Although there are concerns that export-oriented Asian economies will be badly hit if US growth slows sharply, recent data has so far supported the hypothesis of "weak synchronisation", whereby strong domestic demand in rapidly-expanding regional markets such as China and India, have partially offset slowing US demand for East Asia's exports. Boosted by strong intra-regional trade flows, East Asia's exports have continued to rise at a respectable pace, notwithstanding the slowdown in exports to the US over the past few quarters. In 2007, intra-regional exports contributed some 6 percentage points to East Asia's export growth of 17%, compared with 1 percentage point contributed by the US market. This should lend some support to GDP growth in Asia, provided the US economy does not go into a deep recession (See Box Story 1).