mas macroeconomic review - october 2011

very recently, our monetary authority of singapore has just issued its' macroeconomic review.

the macroeconomic review is published twice a year in conjunction with the release of the MAS monetary policy statement. the review documents the economic policy group's (EPG) analysis and assessment of macroeconomic developments in the singapore economy and shares with market participants, analysts and the wider public, the basis for the policy decisions conveyed in the monetary policy statement. it also features in-depth studies undertaken by EPG on important economic issues facing singapore. the mas macroecominc review can be viewed at:

http://www.mas.gov.sg/resource/publications/macro_review/2011/MROct11.pdf

my comments:

the mas macroeconomic review is a lenghty one coming in at around 109 pages. and credit to the mas for 'telling-it-as-it-is' or calling a spade, well, a spade.

with the new managing director of the imf, ms christine lagarde warning of the world entering into a dangerous new phase, and world bank chief, mr robert zoellick saying that the recent europe debt deal just basically buying time. mr zoellick expressed his hope that the upcoming G20 summit in france will go beyong the liquidity crisis and build foundations for global growth.

the mas macroeconomic review generally presents a realistic picture of the dark clouds in the horizon. my take is that hiring is expected to slow down while inflation which is currently at 5.5% will moderate but continue to stay high with a projected rate of 5% for the first half of 2012 due mainly to record high prices of COEs stemming from our government's policy to curb the growth of the vehicle population and the other being fewer cars being scrapped.

despite the soaring price of a COE and according to the credit bureau singapore, the average car loan taken-up has revved up in size by nearly 40% since 2009 to $85,105.00.

and with properties continuing to chalk up price increases with no-cooling off in the hdb market either, it seems many people are throwing caution to the wind to own both cars and a place to call home.

therefore, with the headwinds coming from both the usa and eurozone, our government has warned of the impact to our economy and it is clear that the consumer here should not continue to spend like there's no tomorrow.

with all the uncertainties hanging over our heads, perhaps this is also an opportune time to review one's financial health and be more prudent with our finances.