Growth seems back on fast lane
SINGAPORE'S economy is expected to do better this year than previously forecast, with more robust growth and milder inflation, according to private-sector economists.
Their bullish outlook was revealed in a survey of 26 economists and analysts by the Monetary Authority of Singapore (MAS). The survey's results were released yesterday .
They now expect the gross domestic product (GDP) to grow 3.8 per cent this year, compared to the previous 2.9 per cent forecast in September, the survey results showed.
This comes after the economy outperformed economists' expectations in the third quarter.
It expanded by 5.8 per cent in this period, compared with the same period last year, higher than the expected 4 per cent.
Last month, the Government had revised its official projection to 3.5 to 4 per cent for the year, up from 2.5 to 3.5 per cent tipped previously.
For the fourth quarter of this year, the respondents expect the local economy to expand by 4.7 per cent, higher than the 3.4 per cent forecast in the previous survey.
Economists told MyPaper that a few of the reasons for their optimism are a global economy that is on the recovery path and improvements in the manufacturing sector, among other sectors.
CIMB economist Song Seng Wun said: "We have seen export growth doing a bit better, manufacturers are a bit busier... Together with a resilient service sector, (all these) contributed to this slightly more optimistic view."
The improved state of the United States economy, and more stable growth in Europe and Asia have also contributed to this, he added.
Barclays economist Joey Chew called the revised, more bullish outlook "a bit of a catch-up to the realities that have already happened" this year.
"Because of the global environment...and export from China doing much better, there is definitely an improved sentiment, given that Singapore is such an open market," she said.
Economists also believe that overall inflation this year will be lower than what they previously thought.
Respondents polled in the MAS survey said they expect inflation for all items in the Consumer Price Index this year to be 2.4 per cent. They had predicted 2.5 per cent in the last survey.
The MAS core inflation - which excludes private road-transport costs and accommodation costs - is anticipated to be 1.7 per cent this year, down from the 1.9 per cent figure given previously.
Projections for GDP growth next year remained stable, at 3.9 per cent.
Economist Tan Khee Giap, an associate professor at the Lee Kuan Yew School of Public Policy, was even more positive.
"The electronic and manufacturing sectors have improved, and the construction sector did not slow down...Going forward, I think a 4 per cent (GDP growth) for next year is certainly possible," he said.