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