SINGAPORE - The Singapore economy is expected to grow 1 to 1.5 per cent this year, from an earlier forecast of 1 to 2 per cent.
Growth next year is tipped to come in between 1 to 3 per cent on the back of a slightly stronger global outlook, the Ministry of Trade and Industry (MTI) said on Thursday (Nov 24).
It made these forecasts in the latest Economic Survey of Singapore, which showed that the economy expanded 1.1 per cent in the third quarter from the corresponding period a year ago - an upward revision from earlier estimates of 0.6 per cent growth.
Compared with the preceding three months, the economy shrank 2 per cent in the July to September quarter.
Statistics released by IE Singapore showed that non-oil domestic exports (Nodx) decreased by 5.4 per cent year-on-year, while non-oil re-exports (Norx) increased by 2.5 per cent. Nodx is expected to shrink 5 to 5.5 per cent this year on the back of lacklustre global growth - a larger contraction than the 3 to 4 per cent contraction previously forecast.
Nodx is expected to pick up next year in line with a stronger global economy, said trade agency IE Singapore, which has forecast a range of negative 1 per cent to 1 per cent for 2017.
Total merchandise trade declined by 5.0 per cent in the third quarter, following the 5.7 per cent contraction in the previous quarter, it said, while total services trade increased by 0.1 per cent to reach $97.7 billion, following the 2.3 per cent rise in the preceding quarter.
The outlook for 2017 is mixed, MTI said. Economies such as the United States, Japan and Asean are expected to pick up pace next year, even as growth in the euro zone and China slow.
However, while global growth is on track to improve on the whole, this might have limited impact on Singapore's exports because companies in the US and China are investing less, and increasingly sourcing for inputs domestically instead of relying on imports.
There are also significant risks, including a mounting backlash around the world against globalisation. This could further weigh on already-weak world trade and dampen confidence, the ministry noted.