SINGAPORE: Private sector economists are more upbeat about Singapore’s economy this year as the global growth outlook continues to brighten, showed a new survey. Growth is expected to come in at 2.5 per cent this year, according to economists polled by the Monetary Authority of Singapore (MAS) in its latest quarterly survey released yesterday. This is up from the 2.3 per cent forecast in the previous survey. The more optimistic view comes as trade-related sectors – especially electronics manufacturing – have enjoyed a boost from stronger global demand. But the pick up has not been broad-based – sectors that rely on local demand, such as construction and food and beverage, remain mired in a slowdown. The labour market is also still not out of the woods.
The MAS survey, which reflects the views of 21 analysts, comes on the back of a Trade and Industry Ministry statement last month that said growth is expected to come in above 2 per cent this year due largely to the improving global outlook. Trade agency IE Singapore has also upgraded its forecast for exports this year. It expects non-oil domestic exports to grow 4 per cent to 6 per cent for the full year, up from earlier estimates of zero to 2 per cent. Survey respondents expect the manufacturing sector, which makes up a fifth of the economy, to continue driving economic activity this year with a growth rate of 5 per cent, up from an estimate of 4.5 per cent in the previous survey.
Maybank Kim Eng economist Chua Hak Bin said while the recovery has been led by electronics manufacturing and trade-related services, it is likely to broaden out to other segments. “Even if manufacturing growth moderates from the breakneck pace seen in the early part of this year, other growth drivers should start kicking in,” added Dr Chua, who expects the economy to expand 3 per cent this year. United Overseas Bank economist Francis Tan, however, said: “The momentum from manufacturing is likely to slow – the fast growth in the first half of the year is not sustainable. “Growth was manufacturing-driven and other sectors have not felt much of a pickup. The service sector is still experiencing slow growth, and it is the largest employer.” He expects the economy to expand 2.4 per cent this year.
The labour market outlook shows tentative signs of benefiting from this stronger growth. Figures released this week by the Manpower Ministry showed the number of workers laid off in the first quarter fell to the lowest level in over a year. But some laid-off workers were having a hard time finding new jobs. “The labour market is expected to still be weak this year because of deeper structural issues,” said Mr Tan. “A much stronger increase in cyclical demand would be needed to give it a lift.”
