Singapore 2019 growth forecast shaved again, to 2.5%: MAS survey of private economists

Despite expectations of a slight decline in overall economic growth, respondents noted that an easing of trade tensions between China and the US could contribute towards a stronger than expected growth result in Singapore.
Despite expectations of a slight decline in overall economic growth, respondents noted that an easing of trade tensions between China and the US could contribute towards a stronger than expected growth result in Singapore.PHOTO: ST FILE

SINGAPORE - Private-sector economists have lowered Singapore's economic growth forecast for 2019 once again, easing slightly from an earlier prediction of 2.6 per cent in December.

They expect growth to come in at 2.5 per cent this year, according to the latest quarterly survey of professional forecasters by the Monetary Authority of Singapore, released on Wednesday (March 13).

A total of 23 private sector economists and analysts responded to the survey conducted in February 2019.

Their expectations for 2019 fall within the Ministry of Trade and Industry's (MTI) forecast for growth ranging from 1.5 per cent to 3.5 per cent, with MTI tipping growth to come in "slightly below the mid-point" of this range.

Since the previous survey in December, economist expectations declined further for a number of sectors, including manufacturing, finance and insurance, wholesale and retail trade, and accommodation and food services. Construction was the only sector which saw a surge in positive sentiment, with the growth estimate rising from 1.5 per cent in December to 2.1 per cent in the latest survey.

Despite expectations of a slight decline in overall economic growth, respondents noted that an easing of trade tensions between China and US could contribute towards a stronger than expected growth result in Singapore.

As such, the easing of trade tensions was cited as the number one upside risk, followed by stronger growth in China and a pause in monetary tightening.

The downside risks to the Singapore economy were a mirror image to the upside risks.

Trade protectionism was listed as the top concern by respondents, even as the proportion of respondents who concur has slid from the earlier survey in December. A further slowdown in China was the next biggest worry, followed by higher interest rates.

 
 

Expectations for headline inflation and core inflation both dipped in the latest survey. Headline inflation is now expected to come in at 1.1 per cent, down from an earlier prediction of 1.3 per cent in December. Core inflation is tipped at 1.7 per cent, down from the 1.8 per cent expected previously.

As for the labour market, respondents expect the unemployment rate to tick up to 2.2 per cent by the year-end, from 2.1 per cent in the previous survey.