Singapore - S'pore to experience slow growth over next few years: DPM Tharman

SINGAPORE: Deputy Prime Minister Tharman Shanmugaratnam said Singapore faces more than a year of slower growth as a result of the poor global economic climate.

Mr Tharman, who is also Chairman of the Monetary Authority of Singapore, said slower growth will persist for "the next few years."

He made the comments in his addendum to President Tony Tan Keng Yam's speech at the opening of Parliament on Monday.

Mr Tharman noted that headline inflation had risen in recent months. But he added that the core inflation rate, which excludes volatile elements such as housing and private transport, remains low. He said the MAS will continue to manage Singapore's exchange rate to dampen inflationary pressures and support economic growth.

The central bank will also boost the financial sector's resilience by enhancing regulations. This includes strengthening the capital framework for banks and insurance companies, introducing liquidity regulations, and enhancing the regulation of trading in Over The Counter (OTC) derivatives.

Banks will be required to maintain prudent capital buffers, in line with and in addition to Basel III minimum requirements.

The risk-based capital framework for insurance companies will also be enhanced.

New liquidity standards will be introduced and MAS will also implement the regulatory reforms in the trading of OTC derivatives that were mandated by the G20 (Group of 20) and the Financial Stability Board.

For retail investors, Mr Tharman said safeguards in the sale of investment products will be strengthened. He added that Singapore will engage and work closely with the international community on global regulatory reforms.

As the economic centre of gravity continues to shift towards Asia, Mr Tharman said Singapore is well placed to shape and contribute to these shifts, and grow as one of the leading financial centres in the region.

-CNA/ac


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