Singapore's third-quarter GDP beats estimates, central bank tightens policy

Singapore's economy grew more than expected in the third quarter from the same period last year, according to advance estimates released by the government on Friday.

Separately, the country's central bank tightened monetary policy for the fifth time in a year, in line with expectations.

Gross domestic product in the July-to-September quarter came in at 4.4%, much higher than the 3.4% predicted by analysts in a Reuters poll, and in line with growth in the second quarter.

The Southeast Asian country avoided a technical recession, with quarterly GDP growth coming in a 1.5% on a seasonally adjusted basis, after a 0.2% contraction in the second quarter from the first quarter.

The Ministry of Trade and Industry in August narrowed Singapore's GDP forecast for 2022 to 3% to 4%, compared to an its previous forecast of 3% to 5%.

Meanwhile, the Monetary Authority of Singapore tightened policy in a widely expected move, as rising costs continue to weigh on the economy.

The central bank said it will re-center the mid-point of its exchange rate policy band, known as the Singapore dollar Nominal Effective Exchange Rate, S$NEER.

Singapore controls policy through its exchange rate rather than interest rates, and can also adjust the slope and width of the band. It manages the strength or weakness of the Singapore dollar against a basket of currencies of its main trading partners.

"Core inflation will stay elevated over the next few quarters, as imported inflation remains significant and a tight labor market supports strong wage increases," the MAS said in a statement.

The Singapore dollar last traded at 1.4234 against the dollar.