SINGAPORE: Singapore's economy is expected to grow six per cent this year, according to a survey of private sector economists by the Monetary Authority.

The number is at the mid-point of the government's latest growth forecast range of five to seven percent.

It is also higher than the previous median growth forecast of 5.4 per cent by the private sector.

The financial services sector will be one of the star performers of Singapore's economy this year, and so will construction.

Private sector economists expect the two sectors to power ahead at a 10 per cent clip in 2007.

With that boost, and the first quarter's stronger-than-expected 6.1 per cent clip, the market consensus is for Singapore's economy to expand 6 per cent this year.

Economists expect the economy to grow about 6.1 per cent in the second quarter, slow slightly to 6 per cent in the third, before finally picking up to 6.2 per cent in the fourth.

Credit Suisse, for one, is even more bullish on the Singapore economy, than the market consensus.

Says Arjuna Mahendran, Chief Investment Strategist, Credit Suisse, "For Singapore we think that growth will probably bottom in the second quarter. In fact global growth will probably reduce or weaken in the second quarter of 2007.

"You probably will see Singapore's GDP growth at about seven per cent. I suspect the third quarter and the fourth quarter will be stronger than the market expects.

"The reason for that is simple. The global industrials cycle has consistently been slowing, since May 2006. I expect around now, in June, we'll see the bottom of the current industrial cycle downswing. From here on, we'll see a re-acceleration.

On the sectoral front, full-year forecasts for all major sectors showed a significant jump - with the notable exception of manufacturing.

Financial services is expected to grow a robust 10.2 per cent this year, on the back of strong loan growth.

The construction, wholesale and trade, and the hotels and restaurants sectors are also likely to perform well.

The manufacturing sector though is expected to grow 6.6 per cent this year, somewhat slower than the previous forecast of 7.6 per cent.

Economists say the key risk for the economy is a slowdown in its US counterpart.

Singapore's non-oil domestic exports is expected to expand between seven and nine per cent this year.

Inflation at the consumer level is forecast to come in at a manageable 1.2 per cent, while the forecast for unemployment has risen a notch from 2.5 per cent to 2.6 per cent.

The Singapore dollar could also appreciate to $1.4900 against the US dollar by the end of the year.

Looking ahead, economists have also upgraded their 2008 GDP forecasts to 5.8 per cent, from 5.5 per cent in the previous survey. - CNA/yy