Economists raise Singapore 2013 growth forecast to 2.9%

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Private sector economists have raised their economic forecast for Singapore.

According to the Monetary Authority of Singapore’s (MAS) latest Survey of Professional Forecasters, economists expect the Singapore economy to grow by 2.9 per cent this year — up from their previous median estimate of 2.3 per cent in June.

The upgrade comes after the Singapore economy expanded by a better-than-expected 3.8 per cent in the second quarter, compared to a year ago. This was much higher than the median forecast of 1.5 per cent reported in the June survey.

The government also raised the country’s growth outlook for the year to 2.5 to 3.5 per cent from an earlier forecast of 1 to 3 per cent.

According to the quarterly poll, GDP growth in the July to September quarter is now estimated at 4 per cent. This is higher than the 3.5 per cent that was reported previously.

Economists said the upgraded outlook for Singapore’s economy stems from a few reasons – recovering growth in the US, a bottoming out in China and a brighter economic picture in the Eurozone.

They said the recent market volatility is unlikely to have a crippling effect on Singapore’s growth.

But some said other risks remain.

Mizuho Bank’s senior economist, Vishnu Varathan, said: “Let’s begin with the US. One thing that’s been fading into the background is the debt ceiling crisis. They’ve not resolved that as of October. That could lead to another bout of shakiness in the markets. We can’t discount that.

“The other one is China. While the incoming data has been encouraging, China is still walking a very tight rope. So they’re not going to go on a no holds barred credit binge anytime soon. So whilst they’re trying to balance policy, the net effect may be rather variable, so it could lead to soft patches as well.”

On inflation, economists have also reduced their median estimate for this year’s consumer price index to 2.5 per cent, compared to 2.8 per cent reported in the June survey.

For Q3 2013, headline inflation is projected at 2.1 per cent. However, MAS core inflation is expected to come in at 1.9 per cent in 2013, slightly higher than the 1.8 per cent in the previous survey.

Standard Chartered Bank’s economist, Jeff Ng, said: “We see limited upside from demand-pull inflation at the moment. The recent cooling measures for the housing market are expected to moderate housing inflation further.

“And for the COE prices, even though they’re high, they’re likely to be dampened by high base effect. So we will watch out more for supply side inflation where wages could go up and that could put pressure on core inflation to go up this year.”

Meanwhile, economists expect certain sectors of the economy such as the finance and insurance sector as well as the wholesale and retail sector to fare better than others in the second half of the year.

Growth in the finance and insurance sector is expected to climb 10.6 percent compared to the previous 6.1 percent forecast in June, while wholesale and retail trade is forecast to increase by 3.5 percent compared to 0.9 percent in the previous poll.

Jeff Ng said: “We look for improvement in manufacturing, especially the electronics in terms of the biomedical sector. For the services sector, we still look for the finance and business services sector to perform very well and in line with the their stellar performance in the first half.”

Economists also expect the MAS to stick to its current policy stance of a gradual and modest appreciation of the Singapore dollar.

Nineteen economists took part in the quarterly survey conducted by MAS in August.

 

 

Source : The Straits Times| September 5, 2013

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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