Singapore economists cautiously optimistic

Singapore is on course for economic growth of up to 4.5 per cent this year but most of the increase should come in the second half, said a forecasting body yesterday.

The cautiously optimistic outlook from the Econometric Studies Unit at the National University of Singapore (NUS) tallies with the government's forecast for an expansion this year of between 2 per cent and 5 per cent.

Peter Wilson and Choy Keen Meng, academics at the NUS, told a regional conference in the city-state yesterday that with tentative signs of a rise in external demand this year, trade-dependent Singapore should see modest growth.

But they cautioned their 3.5 per cent to 4.5 per cent forecast could be blown off course by a sustained rise in oil prices beyond US$28 (HK$217) a barrel; a slowdown in global demand for electronics; or slower than expected growth in key export markets.

Last year, Singapore's gross domestic product grew an estimated 2.2 per cent as it made a patchy recovery from the recession of 2001, when it shrank 2 per cent.

'While the pace of economic activity is likely to slow further in early 2003 with the softening of growth in the major global economies, there are no clear signs yet that this need be substantial, and the outlook for the full year remains quite positive,' they said.