UOB sees good year ahead in 2014 for Singapore and other exporting economies

Next year is likely to be a good year for Singapore and other major exporting countries, according to UOB.

Its optimism stems from firmer expected demand from developed economies.

UOB head of economic treasury research Jimmy Koh said: "Despite the economic headwinds experienced over the past year, we expect to see continued improvement in the United States, Europe and Japan as we enter 2014."

He noted that recent US economic data, such as employment and housing, has been on a gradual path towards recovery and will likely continue into the new year.

The likely pullback of the US Federal Reserve's bond-buying programme will mean a strengthening of the US dollar against Asian currencies, Mr Koh added.

That in turn will benefit countries reliant on exports, including Singapore, Malaysia, Indonesia, Thailand and China.

UOB expects the withdrawal - or tapering - of the Fed monetary stimulus in the first half of next year, probably in March.

Mr Koh also said risks over Europe's stability are declining, which, coupled with rising business confidence in Japan, may lead to an increase in foreign corporate investments in high-growth Asia.

UOB forecasts that gross domestic product in the US will grow by three per cent next year, with UOB Asset Management head of multi-asset strategy Anthony Raza making an overweight call on US equities.

Mr Raza predicts that the Singapore stock market is likely to see gains of 6 to 7 per cent next year.