SINGAPORE: Private sector economists expect the Republic’s economy to grow by 1.8 per cent for 2016, according to a quarterly survey released by the Monetary Authority of Singapore (MAS) on Wednesday (Sep 7).
This is unchanged from an earlier forecast in the previous survey in June, even though Singapore’s gross domestic product (GDP) growth in the second quarter exceeded the median forecast of 2 per cent in the previous survey by 0.1 per cent.
In 2016, economists expect the growth in the manufacturing sector to edge up by 0.7 per cent, up from a flat prediction in the previous survey, while wholesale and retail trade is also expected to grow by 2.1 per cent this year, slightly more than the 2 per cent prediction in June.
However, the finance and insurance industry is now expected to grow 2 per cent, down from 2.9 per cent predicted last quarter, while the predicted growth of the construction sector was also revised downwards from 3.3 per cent to 3 per cent and accommodation and food services from 1.8 per cent to 1.4 per cent.
For the third quarter of 2016, survey respondents said they expect GDP to expand by 1.7 per cent.
INFLATION, EMPLOYMENT PREDICTED TO FALL FURTHER
Inflation is still expected to slow, with the economists forecasting the consumer price index (CPI) to come in at -0.5 per cent for the full year, down from the -0.4 per cent forecast in June.
In the second quarter, inflation fell by 0.9 per cent, compared to the predicted drop of 0.7 per cent. The survey respondents expect the CPI to fall by 0.4 per cent in the third quarter.
Core inflation - which excludes accommodation and car prices - is expected to increase by 1 per cent, slightly higher than the 0.8 per cent predicted in the previous survey.
Looking ahead, economists said they expect the unemployment rate to be 2.2 per cent at year-end, up from the 2.1 per cent predicted in June.
The respondents also revised their predictions for the Republic's economic growth for next year: GDP is now expected to come in at 1.8 per cent in 2017, compared to the earlier prediction of 2.1 per cent. Headline inflation and MAS core inflation for next year are forecast to be 1 per cent and 1.4 per cent respectively.
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 22 economists and analysts, MAS said.