Jun 12, 2014

    Economists more upbeat about Q2 growth

    ECONOMISTS are more upbeat about Singapore's second-quarter economic growth than they were earlier in the year, according to a survey conducted by the Monetary Authority of Singapore (MAS).

    The survey, which polled 23 private-sector analysts on their forecasts, showed that economists expect the Singapore economy to grow 3.3 per cent in the three months to June, over the same period last year.

    This is up from the 3 per cent growth forecast in a similar survey conducted in March, The Straits Times reported.

    Inflation expectations for the full year have also moderated in the latest survey, whose findings were released yesterday.

    Respondents said consumer prices are likely to go up 2.2 per cent this year, down from an earlier estimate of 2.8 per cent.

    But the forecasters are not expecting the MAS core inflation measure - which strips out accommodation and private transport costs - to ease. The median core inflation forecast for this year remained at 2.4 per cent, in the latest survey, The Business Times said.

    The Government expects core inflation to stay elevated at 2 to 3 per cent this year, given that domestic costs will face persistent wage pressures from Singapore's tight labour market.

    Inflation in the second quarter is likely to come in at 2.6 per cent, the poll showed.

    Analysts expect full-year growth to come in at 3.8 per cent. This was unchanged from their forecasts in March.

    But their take on various economic sectors has shifted.

    The median forecast for manufacturing growth is now a higher 5.6 per cent, compared to 5 per cent a quarter ago. Wholesale and retail trade is also expected to grow at a stronger 4.9 per cent, up from a median forecast of 3.8 per cent in March.

    But the analysts are less optimistic about accommodation and food services. The median growth forecast for the sector fell to 2.1 per cent, from 2.8 per cent a quarter ago.

    The economy is expected to grow 3.9 per cent next year, while consumer prices are likely to increase by 2.5 per cent, according to the economists' latest forecasts.

    The unemployment rate was projected to be 1.9 per cent at year-end, unchanged from the March survey.