Economists less upbeat about Singapore's growth this year

Economists have become less optimistic about Singapore's growth prospects for this year, after the economy expanded at a lower-than-expected rate in the April to June quarter. -- PHOTO: ST FILE
Economists have become less optimistic about Singapore's growth prospects for this year, after the economy expanded at a lower-than-expected rate in the April to June quarter. -- PHOTO: ST FILE

SINGAPORE - Economists have become less optimistic about Singapore's growth prospects for this year, after the economy expanded at a lower-than-expected rate in the April to June quarter.

They are now projecting that the economy will grow 3.3 per cent for the full year, down from a forecast of 3.8 per cent three months ago.

But they believe economic activity will pick up next year, leading to growth of 3.7 per cent.

On the bright side, inflation this year will also likely come in lower than earlier estimated, according to a survey of 22 private-sector economists released by the Monetary Authority of Singapore on Wednesday.

The economists lowered their growth expectations for this year for nearly all sectors of the economy, from manufacturing and construction to hotel and food services and trade.

In particular, they now tip exports to shrink this year by 1.1 per cent, instead of growing 4.1 per cent as in their previous prediction.

They also believe wholesale and retail trade will expand just 2.6 per cent for the whole year, down from a projection of 4.9 per cent growth in June.

Manufacturing and construction are now expected to grow 4.2 per cent and 4.7 per cent respectively, in contrast with an earlier forecast of 5.6 per cent growth in each sector.

This comes after Singapore's economy grew 2.4 per cent in the second quarter over the same time last year, below the 3.3 per cent expansion that private-sector economists had predicted.

The Government last month narrowed its full-year growth forecast to between 2.5 per cent and 3.5 per cent, from its previous projection of between 2 per cent and 4 per cent.

As for inflation, the economists are now tipping a 1.8 per cent rise in overall consumer prices for the whole year, down from 2.2 per cent in the previous survey.

They have also cut their forecast for core inflation, which excludes accommodation and private road transport costs, to 2.2 per cent from 2.4 per cent.