MAS survey: Economists raise GDP growth forecast to 5.8%

Singapore's economy will grow by 5.8 per cent this year, more robustly than the 5.5 per cent expansion predicted earlier, a survey of professional forecasters has found.

The estimates by 24 economists and analysts, in the quarterly survey by the Monetary Authority of Singapore (MAS), pegged growth at between 5 per cent and 6.9 per cent. That was wider than the 5 per cent to 5.9 per cent range the survey had projected in December.

HL Bank senior strategist Jeff Ng said the upgrades reflect the improving levels of economic activity that have been discernible since the last quarter of last year.

"Going forward, we see upside risks. However, the numbers are likely inflated by base effects," said Mr Ng, who expects 6.3 per cent gross domestic product (GDP) growth this year.

Last month, the Ministry of Trade and Industry (MTI) left unchanged its forecast for the GDP to grow between 4 per cent and 6 per cent. This would make it the fastest growth since 2011, when the economy grew by 6.3 per cent.

However, it comes off a particularly low base as MTI estimates the economy shrank 5.4 cent last year in its worst recession driven by the pandemic.

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For this year, construction was seen as the sector that will expand the most, followed by accommodation and food services.

Seventy-five per cent of respondents also projected the private residential property price index to be higher this year. Manufacturing was projected to grow by 4.7 per cent, more than the previous median estimate of 4.5 per cent. Growth in private consumption was estimated at 7.9 per cent, less than the earlier forecast of 8.5 per cent, but non-oil domestic exports growth was raised to 6.9 per cent from 4 per cent.

The upside cited most frequently for the growth outlook was a containment of the Covid-19 outbreak.

On the flip side, a further deterioration in the Covid-19 situation, from new outbreaks or delays in vaccine deployment, topped the list of downside risks to growth outlook.