Experts stick to 3.2% economic growth for this year: MAS poll
MAS survey shows economists divided on how external growth will affect Singapore
While maintaining their forecast for economic growth at 3.2 per cent for the year, economists are divided on how the global outlook may impact the local economy, a new poll by the Monetary Authority of Singapore found.
The latest survey, released yesterday, found that economists saw external growth as having both upside and downside risks for Singapore.
Manufacturing is expected to grow by 7.6 per cent year on year, up from the earlier prediction of 5.3 per cent in the June survey, reversing earlier fears of a slowdown in the key sector that makes up a fifth of the economy.
The sector outperformed their forecast for the second quarter, growing by 10.2 per cent compared with their June prediction of 6.3 per cent.
In contrast, the construction sector shrank by 4.2 per cent this year - double the 2.1 per cent drop seen in the June poll.
DBS senior economist Irvin Seah said construction might have to "face a long winter due to a confluence of factors", including the impact of property cooling measures and deferment of the high-speed rail.
The accommodation and food services sector is tipped to perform better than previously expected, with 2.9 per cent growth, up from 2.2 per cent in the previous survey.
The finance and insurance sector is expected to expand by 6.7 per cent, down from a 7 per cent rise in the previous survey, and the wholesale and retail trade sector is forecast to grow by 1.5 per cent, compared with a 2 per cent increase previously.
The outlook for trade-dependent sectors follows the upside possibility of stronger global growth, driven by better performance in the US economy - cited half of the 23 economists polled.
The forecast for growth in non-oil domestic exports this year was kept at a robust 5 per cent, higher than the Government's own estimate of a 2.5 per cent to 3.5 per cent rise.
Economists were less optimistic about the domestic property market and highlighted worries over faster-than-expected rate hikes by the US central bank, tightening liquidity controls in emerging markets and a slowdown in China.
Almost all cited trade protectionism as a major risk factor, with further escalation of trade rhetoric by the US and its trading partners, and implementation of tariffs causing concern.
"The fact that analysts highlighted both the strengthening US economy and the China slowdown shows a divergence of views by economists over how external growth will affect Singapore," noted Mr Seah.
Economists polled expect overall economic growth of 2.7 per cent next year, unchanged from the previous estimate, with headline inflation of 1.5 per cent.
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