SINGAPORE: The economy is expected to remain on its expansion path for 2018, despite downside risks brought about by trade tensions between two of the world's biggest economies, United States and China.
The Monetary Authority of Singapore (MAS) said in its biannual Macroeconomic Review on Friday (Apr 27) that growth will largely come from trade-related sectors such as electronics, as the country continues to leverage on sustained demand in the global electronics industry.
But while global tech expansion is projected to remain firm, it is expected to continue at a more restrained pace as the global economic cycle matures.
Nevertheless, growth momentum is expected to remain strong as an improving labour market and increased consumer spending will likely lead to positive spillover effects for Singapore.
MAS also cautioned that global trade tensions between the US and China have posed some downside risks to Singapore's economy.
Due to strong industrial links between Singapore and China, the imposition of US tariffs on Chinese products would have an impact on Singapore's gross domestic product (GDP).
The central bank, however, assessed that the overall impact should be limited if the trade disputes do not escalate.
MAS expects Singapore's GDP in 2018 to come in at slightly above the middle of the forecast range of 1.5 per cent to 3.5 per cent, unchanged from its monetary policy announcement two weeks ago.