Singapore: Economists raise full-year GDP forecasts to 2.5%

For next year, analysts' median expectation is for GDP growth to reach 2.5%.

Singapore launches shuttle bus service between Changi Airport, Tanah Merah Ferry Terminal
Singapore. Reuters (Representational Image)

There has been a slight optimism amongst economists and analysts asked by the Monetary Authority of Singapore (MAS), as they raise their economic growth forecast for the year to 2.5% from 2.3% in the previous survey.

Looking at forecasts on different sectors, economists are the most optimistic on the manufacturing sector, which is expected to expand its output by 5%.

In terms of other sectors, growth expectations are uneven. For example, the outlook for the finance & insurance sector has dampened from a 2% growth in the previous survey to 1.9% in the current survey. It was the same story with the construction sector, whose outlook turned to a bleak 0.2% growth.

Economists are also pessimistic with the accommodation & food services sector which they predicted to grow by only 1%, after a 1.3% growth forecast in the previous survey. Meanwhile, expectations for wholesale & retail trade remained flat at 1.1%.

"As reflected by the mean probability distribution, the most likely outcome is for the Singapore economy to grow by between 2.0 to 2.9% this year. This is unchanged from the last survey, albeit with a higher probability assigned to this range in the current survey," MAS said.

When it comes to private consumption, analysts' expectation of 1.1% growth this year is unchanged.

If there is a drastic change in outlook, it will be for non-oil domestic exports, which is expected to clock in only a 5.6% expansion after economists predicted a 6.1% gain during the last survey.

On the other hand, the survey revealed that consumer price index is seen to rise by a measly 0.9% whilst MAS core inflation is to inch 1.5% higher.

For next year, analysts' median expectation is for GDP growth to reach 2.5%, while CPI-All Items and MAS Core Inflation are projected to be 1.4% and 1.7%, respectively.