MORE economists are now expecting a sharp recovery for the Singaporean economy in 2010, according to a new survey.

The Monetary Authority of Singapore (MAS) poll of 19 economists shows that their consensus is for growth hitting 4.2 per next year, as compared to the 3.3 per cent they forecast in March.

The economic bounce-back will follow a deep 6.5 per cent contraction this year, says the poll, which compares to a 4.9 per cent shrinkage forecast in an earlier March survey.

Some economists have already factored in a more upbeat take on the economy. Standard Chartered Bank economist Alvin Liew has boosted his growth forecast for next year to 4.4 per cent, up from 2 per cent.

The growing number of upgrades comes amid promising signs of 'green shoots' as the stock and property markets stage rallies unthinkable only a few months ago.

Also, the Purchasing Managers' Index - a leading indicator of manufacturing activity - turned positive last month for the first time in nine months.

Economists say that just as Singapore's extreme openness causes it to be hit disproportionately in the downturn, it can benefit it more during a recovery.

'Huge and synchronised stimulus plans are beginning to take effect, in China first and increasingly in other countries. This will lead to a fairly powerful regional trade recovery and Singapore will be very sensitive to that,' said HSBC economist Robert Prior-Wandesforde.

While economic conditions are improving, economists urge caution at a time when Singapore still faces its worst recession ever.

'At the end of the day, a sustainable recovery story is still predicated on a US economic recovery. And the signs pointing to the latter are still relatively weak at this juncture,' OCBC Bank economist Selena Ling said.

Read the full report in Thursday's edition of the Straits Times

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linettel@sph.com.sg