GDP growth target for 2012 is 4-5%. DBS economists forecast for 2012 GDP growth is 4.5%. Growth will largely be driven by private consumption and investments, and supported by public spending. Construction and oil & gas will be the key growth sectors in 2012, while services and manufacturing will continue to support the economy. Agriculture growth is expected to moderate due to the moderating commodity prices.
The Governor stated that there is no concern on the level of household indebtedness. Growth in
household debts moderated to 12.5% from 13.7% a year ago, and this growth is supported by household deposits which expanded by 12.2% (2010: 7.9%). Household debts as a proportion of GDP have stabilized at 76.6% (2010: 75.8%). The Central Bank does not expect to introduce any further consumer lending rules after a series of pre-emptive measures implemented over the last two years, but will continue to monitor the household indebtedness levels. We understand that the responsible lending rules implemented
by the Central Bank were also adopted by the Development Banks and Co-operatives and Building Societies.
The Central Bank is also expected to propose two new legislative frameworks - Financial Services Act and Islamic Financial Services Act - to consolidate and rationalise the existing BAFIA, Islamic Banking Act, Insurance Act, Takaful Act, Payment Systems Act and Exchange Control Act. The timeline is June this year.
by HWDBS