Economists raise Singapore’s 2017 growth forecast to 2.5%

SINGAPORE: Private-sector economists have raised their growth forecast for Singapore’s economy for 2017, according to a quarterly survey released by the Monetary Authority of Singapore (MAS) on Wednesday (Jun 14).

The economists polled in the survey said they expect the economy to grow 2.5 per cent this year, up from their forecast in March of a 2.3 per cent growth.

The forecast was raised after Singapore’s economy expanded by a quicker-than-expected 2.7 per cent in the first quarter, above the analysts’ earlier forecast of 2.6 per cent.

The Government has forecast 1 per cent to 3 per cent growth for the year, with growth likely to come in higher than 2 per cent.

Manufacturing is expected to continue its turnaround from the end of last year, with economists predicting a 5 per cent growth for the sector this year – up from their 4.5 per cent forecast in the March survey.

The finance and insurance industry is expected to post the second-highest growth of 1.9 per cent, although this is slightly lower than the 2 per cent growth forecast earlier. The growth forecast was also cut for the construction sector – from 0.3 per cent to 0.2 per cent – as well as for the accommodation and food services sector – from 1.3 per cent to 1 per cent.

The economists also lowered their forecast for exports, with non-oil domestic exports expected to grow 5.6 per cent, down from 6.1 per cent in the previous forecast.

INFLATION TO COME IN AT 0.9%

Inflation for the year is expected to come in at 0.9 per cent, down from 1 per cent in the previous survey. Core inflation – which excludes accommodation and car prices – is expected to come in at 1.5 per cent, unchanged from the March survey.

The unemployment rate is expected to be 2.4 per cent at year-end, also unchanged from the earlier survey.

For 2018, the median forecast is for GDP growth to reach 2.5 per cent, while inflation is projected to come in at 1.4 per cent and core inflation at 1.7 per cent.

The MAS Survey of Professional Forecasters is conducted every quarter after the release of detailed economic data for the preceding three months. The median forecasts in the latest report were based on the estimates of 21 economists, MAS said.