Stronger than expected fourth quarter growth in Singapore driven by improved global demand led economists to upgrade their 2017 projections for the Southeast Asian city state, an official survey of forecasters showed Wednesday.
The 23 economists surveyed expect growth to come in around 2.3 percent this year, up from the previous forecast of 1.5 percent, the country's central bank, Monetary Authority of Singapore (MAS), said in its March survey of professional forecasters.
The upgrade in forecast came after Singapore beat expectations to register a 2.9 percent year-on-year economic expansion in the final three months of 2016, helped by a 11.5 percent year-on-year jump in manufacturing growth.
That brought overall growth in 2016 to 2 percent, faster than the 1.9 percent a year earlier.
The MAS survey is conducted every quarter and does not represent the views of the central bank. Official forecast by the Singapore government puts economic growth at 1 to 3 percent this year.
Singapore's small, open economy is particularly vulnerable to any decline in global trade. The slowdown in global growth and pull back in external demand saw the city state's economy stalling for much of the past two years.
The global economy took a turn for the better towards the end of 2016, which boosted Singapore's exports. The latest MAS survey found economists expecting non-oil domestic exports to grow 6.1 percent this year, higher than the 0.3 percent that they projected in the previous survey in December.
Despite the more sanguine view, some economists have remained cautious given fresh challenges in the form of potential protectionist trade policies by U.S. President Donald Trump and economic restructuring domestically.
In a note earlier this month, economists from Standard Chartered Bank said Singapore's recent robust export performance was likely driven by temporary factors such as then-rising oil and chip prices, and a pick-up in demand for electronics — a key export product of Singapore.
"We remain cautious on the export outlook, as the recent pick-up in electronics export demand is not broad-based. We expect strong export performance in H1 2017, but a slowdown in export growth in H2 2017," they wrote.