Slower growth likely as export momentum eases, says report

A container vessel in waters off Pulau Bukom. The report said Singapore's economy is forecast to expand by 3 per cent this year, slowing from last year's 3.6 per cent. Export-led manufacturing is tipped to moderate although it will be partly offset b
A container vessel in waters off Pulau Bukom. The report said Singapore's economy is forecast to expand by 3 per cent this year, slowing from last year's 3.6 per cent. Export-led manufacturing is tipped to moderate although it will be partly offset by a recovery in domestic service sectors.PHOTO: AGENCE FRANCE-PRESSE

This mirrors outlook for rest of region, with growth largely backed by domestic demand

The local economy is expected to expand at a more sedate pace this year compared with last year, due to slower manufacturing demand and reduced trade, says a new report.

It noted that this mirrors the outlook for the rest of South-east Asia, where growth will largely be supported by domestic demand as export growth slows.

The economy here is forecast to expand by 3 per cent this year, slowing from last year's 3.6 per cent, said the report by advisory firm Oxford Economics and commissioned by the Institute of Chartered Accountants in England and Wales (ICAEW).

The Ministry of Trade and Industry expects full-year growth to come in between 2.5 per cent and 3.5 per cent this year.

Export-led manufacturing is tipped to moderate although it will be partly offset by a recovery in domestic service sectors.

Regional growth is forecast to come in at 4.9 per cent this year, from 5.3 per cent last year, the report said. The slowdown is expected to be broad-based, with only Indonesia growing faster.

Manufacturing numbers and recent trade data point to more moderate growth in the region, said Ms Sian Fenner, lead Asia economist at ICAEW Economic Advisor and Oxford Economics.

"This is consistent with our view that export growth across the region will ease from 2017 performance, reflecting softer Chinese import demand and a normalisation in the global electronics cycle."

Mr Mark Billington, ICAEW's regional director for South-east Asia, added: "Fading global trade tailwinds are likely to mean a broad-based moderation in export growth in the region, including Singapore.

"That said, exports should still be supportive of growth, in the absence of any escalation in United States-China trade frictions."

A version of this article appeared in the print edition of The Straits Times on June 09, 2018, with the headline 'Slower growth likely as export momentum eases, says report'. Print Edition | Subscribe