Singapore economy to grow 3% this year

SEA 9 Singapore

The figure is down from the 3.3 per cent forecast in the previous survey, after gross domestic product growth in the third quarter was lower than expected.

Private sector economists are less upbeat about the growth outlook for the Singapore economy this year, and have moderated their growth expectations for almost all sectors, according to a quarterly survey released by the Monetary Authority of Singapore (MAS) on Wednesday (Dec 17).

The economists polled in the survey said they expect Singapore’s economy to grow by 3 per cent this year, down from their median forecast of 3.3 per cent in the previous survey in September.

The latest estimates are in line with the official growth forecast of 2.5 to 3.5 per cent, which was announced in August.

The lower forecast comes after gross domestic product (GDP) growth in the third quarter was weaker than expected. The economy expanded by 2.8 per cent during the quarter, lower than the median forecast of 3.2 per cent in the previous survey.

Manufacturing is now expected to grow by 3.5 per cent this year, down from the 4.2 per cent in the previous survey. Construction is now expected to grow by 3.4 per cent, down from 4.7 per cent. The forecast for wholesale and retail trade has been revised to 2.4 per cent from 2.6 per cent, while the forecast for accommodation and food services has been revised to 1.2 per cent from 1.5 per cent.

Finance and insurance was the only sector that had its forecast revised upwards. The sector is now expected to expand by 7.3 per cent, up from the 5.5 per cent in the previous survey.

INFLATION LIKELY TO SLOW

Inflation is expected to slow, with the economists forecasting the consumer price index to come in at 1.1 per cent for the full year, down from the 1.8 per cent forecast in September. Core inflation – which excludes accommodation and car prices – is expected at 2 per cent, down from 2.2 per cent in the previous survey.

Looking ahead, economists expect the environment to remain cautious and the slow growth to continue. GDP is expected to expand by 3.1 per cent in 2015, down from the 3.7 per cent in the September survey. Headline inflation and MAS core inflation are forecast to be 1.1 per cent and 1.9 per cent respectively.

Dr Tan Khay Boon, a senior lecturer at SIM Global Education, said: “I think we can confidently say that the growth will be more gradual in coming years compared to before. And on top of that, it appears the external environment is still quite uncertain, so I can see that the forecast for manufacturing growth is still quite modest, and exports growth to be less than 2 per cent.

“That shows the external environment is still challenging. For a trade-dependent economy like Singapore, it somehow implies our growth rate will be more gradual in view of the external environment.”

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 22 economists, MAS said.

 

 

Source : Channel News Asia | December 17, 2014

Thomas D’Innocenzi

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About thomasdinnocenzi

Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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