Private sector economists lower Singapore’s GDP to 2.5% for 2019

In the report, a step down in manufacturing, finance and insurance, wholesale and retail trade, and accommodation and food services sectors were offset by a stronger improvement in the construction sector.

Singapore Source: Bloomberg

Private sector economists have lowered the growth expectations for Singapore this year to 2.5% from 2.6% previously, a survey of professional forecasters by the Monetary Authority of Singapore (MAS) revealed on Wednesday.

In the report, a step down in manufacturing, finance and insurance, wholesale and retail trade, and accommodation and food services sectors were offset by a stronger improvement in the construction sector.

The survey, which polled 23 private sector economists and analysts, reflected a mean distribution reading for Singapore to be between 2.0% and 2.9% this year, in contrast to a 2.5% to 2.9% range in the December survey, which showed a higher probability.

For the first quarter, year-on-year growth is expected to expand by 1.9%. A weaker-than-expected fourth quarter had caused the final quarter of the year to expand by 1.9%, lower than the 2.4% forecast in the earlier survey in December.

For this year, the majority of respondents said an easing of trade tensions between China and the United States could contribute towards a stronger-than-expected growth performance for Singapore.

Stronger growth in China resulting from fiscal and monetary stimulus could lead to an improvement in Singapore’s performance, the respondents said. A pause in monetary policy tightening in developed economies could also provide as a relief.

Meanwhile, trade protectionism continues to remain a downside to growth. A rise in global interest rates and a hard landing in China are other potential risks to the Singapore economy, the survey showed.

Headline inflation up 1.1%, core inflation at 1.7%, for 2019

For this year, headline inflation and core inflation - an indicator which excludes accommodation and private road transport costs – are forecast to come in at 1.1% and 1.7%, respectively, lower than the 1.3% and 1.8% in the previous survey.

For 2020, Gross Domestic Product (GDP) is expected to reach 2.4% while headline and core inflation are expected to be higher than this year, at 1.5% and 1.7%.

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