Economists lower 2013 forecasts for Singapore growth and inflation

The smaller-than-expected expansion in Singapore's economy in the first three months of this year has led economists to downgrade their growth projections for the full year.

They now believe the Singapore economy will grow by 2.3 per cent this year, according to the median forecast of 22 private sector economists polled by the Monetary Authority of Singapore (MAS) in May.

This is down from their previous projection of 2.8 per cent growth in a similar survey conducted three months ago, the MAS said in releasing the poll results on Wednesday.

Although the economists expect the financial services and construction sectors to perform better this year than earlier estimated, they have cut their forecasts for manufacturing and trade growth, in line with the trends seen so far this year.

Singapore's economy grew by 0.2 per cent in the first quarter over a year ago, less than the 0.8 per cent the economists had tipped, due to poor performances in manufacturing and trade.

On the bright side, economists have also reduced their forecasts for inflation this year. They expect overall inflation to average 2.8 per cent for the whole of 2013, down from their earlier prediction of 3.8 per cent.

The economists also project core inflation, which excludes private transport and accommodation costs, to average 1.8 per cent, down from the 2 per cent they previously expected.

The Government's official forecast is for the economy to grow by 1 to 3 per cent this year. It expects overall inflation to come in at 3 to 4 per cent and core inflation to be 1.5 to 2.5 per cent.