Singapore's economy expected to grow by 2.7% in 2017: Report

Business loans rose to 8.1 per cent year-on-year in the first quarter, the strongest growth in loans since 2014, the report noted.
Business loans rose to 8.1 per cent year-on-year in the first quarter, the strongest growth in loans since 2014, the report noted.PHOTO: REUTERS

SINGAPORE - The Singapore economy is forecast to grow by 2.7 per cent this year despite uneven sector performance, noted a report by the Institute of Chartered Accountants in England and Wales (ICAEW) out on Thursday (June 22).

This projection is up from the 2 per cent growth Singapore achieved in 2016.

The better showing will largely be driven by "improved growth dynamics and the ongoing recovery in global trade".

Mr Mark Billington, regional director for ICAEW South-east Asia, said: "We are confident that an improved external environment will help sustain Singapore's growth - despite the drag from domestic factors."

ICAEW's Economic Insight South-east Asia report for the second quarter of 2017 noted that growth, however, will be uneven across sectors due to differing external and internal factors. External-dependent sectors such as the financial services industry can expect a brighter outlook.

"A modest recovery in business investment may soon be underway, as business loans rose to 8.1 per cent year-on-year in the first quarter, the strongest growth in loans since 2014," the report noted.

However, sectors that are more dependent on domestic factors will need more time to get back on track - weighed down by concerns around unemployment, ongoing correction in the property market, and the relatively subdued growth in private consumption and household spending.

"Moving forward, we expect domestic demand to remain the primary driver of growth. As the recovery in external global trade remains unsteady, we envisage Asean nations using more fiscal stimulus to support domestic demand," Mr Billington added.