Economists cut Singapore's 2023 growth forecast to 1.4% amid global slowdown: MAS survey

SINGAPORE — Private sector economists have cut their forecast for Singapore's economic growth this year to 1.4 per cent, down from their March projection of 1.9 per cent.

The findings from the latest survey of professional forecasters were released by the Monetary Authority of Singapore (MAS) on Wednesday (June 14). The survey was sent out on May 25.

Spillovers from an external growth slowdown emerged as the most cited downside risk to domestic outlook, as identified by 61 per cent of the 24 respondents. It was most frequently ranked as the top downside risk.

The respondents also flagged inflationary pressures and an escalation in geopolitical tensions as risks to the domestic growth outlook.

China in May banned US semiconductor giant Micron from selling chips to its key domestic industries, marking yet another escalation in the tense relations between both countries.

Last month, some private sector economists said Singapore faces a "high risk" of slipping into a technical recession in the second quarter of this year.

About 71 per cent of respondents to MAS' latest survey cited more robust growth in China — underpinned by economic reopening and macroeconomic policy easing — as the biggest upside risk to Singapore's growth outlook.

Earlier this year, China reopened its borders and ended a requirement for incoming travellers to quarantine.

Singapore's Ministry of Trade and Industry (MTI) in May maintained its 2023 growth forecast at 0.5 per cent to 2.5 per cent, with growth likely to “come in at around the mid-point” of this range.

Respondents to MAS' latest survey estimate that gross domestic product (GDP) will expand by 2.5 per cent in 2024.

INFLATION

Private-sector economists expect core inflation to come in at 4.1 per cent in 2023, unchanged from their projection in March.

Core inflation, which excludes accommodation and private transport costs, is forecast to hit 4.6 per cent in the second quarter of this year, according to the survey respondents.

The economists also expect core inflation to ease to 3 per cent next year. CNA