SINGAPORE: Private sector economists are pencilling in higher growth for Singapore’s economy this year, the latest quarterly survey from the Monetary Authority of Singapore (MAS) showed on Wednesday (Mar 14).
Economic growth for 2018 is expected to come in at 3.2 per cent, according to the 24 economists and analysts polled. This is up from an earlier 3 per cent forecast in December.
For next year, expectations are for Singapore’s gross domestic product (GDP) growth to expand at a slightly slower rate of 2.8 per cent.
This comes on the back of official data released last month, which showed the economy clocking faster-than-expected growth of 3.6 per cent for 2017 and the year’s final quarter. Official estimates tipped 2018 growth to come in slightly above the middle of the forecast range of 1.5 to 3.5 per cent, barring the materialisation of any downside risks.
Since the last survey in December, analysts have raised their full-year expectations for most economic indicators. These include finance and insurance, wholesale and retail trade, accommodation and food services, as well as private consumption.
The indicators that either maintained or had a downward revision in their 2018 forecasts are manufacturing, construction and non-oil domestic exports.
Still, nearly half of the analysts surveyed singled out an outperformance in the electronics sector as the main potential upside for the local economy. Buoyed by stronger global demand, the manufacturing sector, particularly the electronics segment, was the key driver of Singapore’s economic growth for 2017 though chances of a moderation have been flagged partly because of a comparison against a high base.
The other upside risk is the generally positive outlook on external growth, cited by 41 per cent of those polled.
There also appears to be increasing optimism about the local property market, with a “noticeable rise” to 41 per cent of respondents citing it, from 27 per cent in the previous survey.
On the other hand, 88 per cent of analysts cited the possibility of a global trade war scenario as one downside risk that they are concerned about, more than double of that in the December survey.
The threat of a slowdown in China’s economy is comparatively more subdued, at 53 per cent of responses, down from 67 per cent previously.
Financial sector uncertainty due to global market movements, at 18 per cent of responses, represents the third most common downside risk for the Singapore economy.
Meanwhile, the forecasts for both headline and core inflation in 2018 remained unchanged at one and 1.6 per cent, respectively.
On the labour front, economists also expect the unemployment rate to be at 2.1 per cent at year-end, unchanged from the previous survey.