SINGAPORE: Private-sector economists have raised their annual growth estimate for Singapore yet again, following a better-than-expected showing by the economy in the first three months of 2017 and the strength in manufacturing, in particular. The Monetary Authority of Singapore said on Wednesday that its latest quarterly survey of professional forecasters showed Singapore’s economy would likely grow 2.5% this year, higher than the median forecast of 2.3% made in the previous survey as well as the 2% growth recorded in 2016. However, the expansion is expected to remain uneven, with manufacturing the only sector to see an upward revision to growth. The survey of 21 economists showed Singapore’s manufacturing sector is now expected to grow by 5% this year, up from the previous estimate of 4.5%. The growth estimate for finance and insurance was cut to 1.9% from 2.0%, while the outlook for accommodation and food services was reduced to 1.0% from the previous forecast of 1.3%. Construction is seen increasing by 0.2%, against the previous median estimate of 0.3%, while non-oil domestic exports, a key indicator of growth, is expected to expand by 5.6%, compared with the earlier forecast of 6.1%.
Singapore’s economy grew by 2.7% in the first three months of 2017 from a year ago, beating forecasts as manufacturing surged along with related services such as transportation and storage, the government reported last month. The strong first-quarter reading prompted the government to say this year’s gross domestic product growth would likely exceed 2%, a forecast that puts the trade-dependent city-state on course to achieving its fastest expansion in three years. “Singapore is starting to go through one of those mini upcycles,” Tim Orchard, Fidelity International’s chief investment officer, equities for Asia Pacific ex-Japan, said at a media briefing on Tuesday. He said that in a small, open economy like Singapore, the recovery in exports would stimulate bank lending which would in turn help the rest of the economy. Manufacturing accounts for about 20% of GDP and around 14% of employment in the city-state.
