Island state on course to expand 4pc: survey
Forecasters are confident the country is on track for economic growth of 4 per cent this year but are slightly more cautious about the outlook for next year, a central bank survey has shown.
The Monetary Authority of Singapore (MAS) yesterday said its quarterly survey of private-sector expectations showed the consensus forecast for this year was unchanged at 4 per cent, in line with the upper end of the government's target range.
But the private sector's average forecast for next year was trimmed to 5.8 per cent from 6.1 per cent in the previous survey amid growing caution about developments in the United States and the key electronics sector.
However, projections for both years are for growth far in excess of last year's, when gross domestic product shrank 2 per cent, the worst performance since 1964. In 2000, GDP expanded 10 per cent.
The MAS survey was based on responses from 25 economists in the two weeks after the government announced GDP data for the second quarter last month.
'The survey participants currently expect real GDP growth to expand 7.3 per cent [year on year] in the third quarter, following the greater-than-expected 3.9 per cent growth in the previous quarter,' the MAS said. 'For the year as a whole, the median forecast remains [unchanged] at 4 per cent.'
But the optimism was hedged with suggestions that growth momentum - or quarter-on-quarter rates - may have peaked.
'Amid signs of slower growth in the US economy and only a moderate rebound in the global electronics sector, the forecasts build in a deceleration in the growth momentum of GDP in the second half of this year,' the survey said.
For the full year, economists expected growth in non-oil domestic exports of 3.4 per cent compared with 7 per cent in the second-quarter survey.
Exports are vital to trade-dependent Singapore's overall economic health. Electronics account for almost 60 per cent of non-oil exports.
The survey suggested that the jobless rate - which was 4.1 per cent at the end of the April-June period - would rise to 4.6 per cent by the end of the year, up from the previous forecast of 4.5 per cent.
Last month, the government narrowed its official full-year GDP target to between 3 per cent and 4 per cent from an already revised 2 per cent to 4 per cent range.
