SINGAPORE: Analysts have boosted their growth forecast for Singapore’s economy for 2017 to 2.3 per cent, up from 1.5 per cent, according to a quarterly survey released by the Monetary Authority of Singapore (MAS) on Wednesday (Mar 15).
This reverses a trend of declining expectations in the industry. Economists had forecast growth of 2.5 per cent in 2017 in March last year, then 2.1 per cent, 1.8 per cent and 1.5 per cent respectively in the following quarters. The Government has forecast 1 per cent to 3 per cent growth for the year.
The economy expanded by 2 per cent in 2016, above the forecasted 1.4 per cent. This was mostly due to a better-than-expected showing of 2.9 per cent in the fourth quarter, above the median forecast of 0.8 per cent in the last survey.
For the first quarter of this year, survey respondents had a median expectation of 2.6 per cent growth. They also projected growth of 2.4 per cent in 2018.
Analysts were bullish about the performance of the manufacturing sector, forecasting growth of 4.5 per cent compared to 1.1 per cent in the previous survey. Their expectations for finance and insurance, as well as wholesale and retail trade, also edged up slightly from 1.8 per cent to 2 per cent and from 1 per cent to 1.1 per cent respectively.
However, forecasts for the construction sector were much lower than the previous survey, plunging from 2.4 per cent to 0.3 per cent. Economists also were less optimistic about the accommodation and food services sector, revising the growth forecast for 2017 from 1.7 per cent to 1.3 per cent.
INFLATION FORECAST AT 1% FOR 2017
Inflation for the year is expected to come in at 1 per cent, unchanged from the analysts’ forecast in the previous survey. For the first quarter of this year, inflation is expected to be 0.8 per cent.
Core inflation - which excludes accommodation and car prices - is expected to be 1.5 per cent for the whole year, slightly above the 1.3 per cent predicted in the previous survey. It is also predicted to come in at 1.3 per cent for the first quarter.
For 2018, headline inflation is expected to be 1.3 per cent while MAS core inflation is forecast at 1.7 per cent.
Economists polled said they expected the unemployment rate to be 2.4 per cent at year-end, unchanged from the previous prediction in December.
The MAS Survey of Professional Forecasters is conducted every quarter after the release of detailed economic data for the preceding three months. The median forecasts in the latest report were based on the estimates of 23 economists, MAS said.