SINGAPORE: Confidence in Singapore’s economic prospects continues to rise, with economists upgrading their growth forecasts in 2017.
The economy is now expected to grow by 2.3 percent this year, the median forecast in the latest economist survey conducted by the Monetary Authority of Singapore showed. This was higher than the 1.5 percent growth previously estimated.
The main driver for growth will remain manufacturing, a sector that should grow by 4.5 percent this year compared with the 1.1 percent previously forecasted. In the near term, the economy is expected to grow by 2.6 percent in the first quarter, while manufacturing is forecasted to grow by 6.1 percent. The MAS survey report, out on Wednesday (March 15), reflected the views of 23 economists and analysts.
The improved forecasts followed the better than expected growth in the fourth quarter last year, when the Singapore economy expanded by 2.9 percent – overshooting the 0.8 percent median forecast. The strong fourth quarter showing in turn pushed 2016 full year growth to 2 percent, also higher than the median forecast of 1.4 percent. This was helped by manufacturing, which was the best performing sector last year and grew 3.6 percent.
The Ministry of Trade and Industry has in February released its official forecast of 1-3 percent growth in 2017, with the hope that global growth will pick up on the back of firm recovery in the United States and resilient domestic demand in Asean.
Economists agreed with that view, as their latest median forecast put non-oil domestic exports growth at 6.1 percent in 2017, up from just 0.3 percent in their previous forecast. They also expect finance and insurance full year growth to slightly improve, from 1.8 percent to 2 percent in the latest survey. For 2018, the full year economic growth should come in at 2.4 percent, the survey results showed.
Meanwhile, this year’s all-items inflation is expected to come in at 1 percent, unchanged from the previous survey, while core inflation – which excludes accommodation and private road transport costs – should be 1.5 percent.
The economist median forecast for 2017 unemployment rate was unchanged at 2.4 percent. The three-month Singapore Interbank Offered Rate forecast of 1.50 percent this year was also unchanged from the previous survey.
