The Macroeconomic Review is published twice a year in conjunction with the release of the MAS Monetary Policy Statement (MPS).

The purpose of the Review is to provide information on the Economic Policy Group’s background analysis and assessment of GDP growth and inflation developments in the Singapore economy, and in doing so, to share with market participants, analysts, and the wider public the basis for the policy decision articulated in the MPS.

If you don’t want to read the whole review, here are some notable quotes inside:

The immediate outlook is clouded by significant uncertainties.

The world economy has entered an uncertain phrase.

The services sector saw a sharp slowdown in hiring.

Domestic cost pressures were strong while external sources of inflation receded.

Prices also saw rapid sequential increases due largely to higher rental values amidst a tight housing market, and sharp increases in COE premiums.

Rental increases will continue given supply constraints in the HDB segment.

COE premiums will remain elevated due to further tightening of the vehicle population policy.

Inflation pressures will ease in 2012 as economic conditions weaken.

GDP growth is expected to come in at around 5% this year.

And just what is causing the supply constraints in the HDB segment? Supply is definitely being ramped up, but there is a lot of demand too.

The increase in the foreign population has moderated to 70,000 a year over the last two years compared to 114,000 annually over 2006-2009.

Now, that is a lot of population growth to cater housing for.

The latest copy of the review can be downloaded here:

MAS Macroeconomic Review October 2011

MAS released their monetary policy statementlast Friday.

Core inflation should gradually ease from an estimated 2.3% in Q4 this year to 1.5% at the end of 2012. It is forecast to be around 1.5-2% in 2012, compared to about 2.1% in 2011.

Growth in the Singapore economy could fall below its potential rate of 3-5%.

MAS will continue with the policy of a modest and gradual appreciation of the S$NEER policy band in the period ahead. However, given the expected moderation in core inflation, the slope of the policy band will be reduced, with no change to the width of the band and the level at which it is centred.