World Economy

Economists raise 2017 Singapore growth forecast, central bank survey shows

Key Points
  • Economists surveyed by the Monetary Authority of Singapore (MAS) expect 2017 growth to be 2.5 percent, up from previous forecast of 2.3 percent
  • More upbeat view was due to better manufacturing, bank lending performance
  • Singapore to release advance estimates of second quarter GDP in early July

Economists raised their forecasts for Singapore's growth this year, compared to three months ago, as they upgraded their views on manufacturing and bank lending, a central bank survey showed on Wednesday.

The median forecast of 21 economists surveyed by the Monetary Authority of Singapore (MAS) was for gross domestic product (GDP) to grow 2.5 percent in 2017, up from the 2.3 percent estimated in the previous survey, published in March.

That would mark a pick-up from 2.0 percent growth in 2016, and would be at the upper end of the government's forecast range.

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The Ministry of Trade and Industry said in May that full-year 2017 GDP growth is likely to come in higher than 2.0 percent "barring the materialization of downside risks", but kept its official GDP growth forecast unchanged at a range of 1-3 percent.

Economists now expect the manufacturing sector to expand 5.0 percent in 2017, up from 4.5 percent seen in the March survey.

They also upgraded their view on bank loans, which are seen increasing 6.2 percent in 2017. The previous median forecast was 3.2 percent growth.

Non-oil domestic exports are expected to grow 5.6 percent in 2017, down from the previous median forecast of 6.1 percent. Other forecasts that were trimmed include construction, now expected to grow 0.2 percent compared to 0.3 percent previously.

The survey's median forecast for year-on-year GDP growth in the second quarter was 2.7 percent, up from the previous median of 2.5 percent.

Singapore's GDP expanded 2.7 percent in the first quarter from a year earlier, but contracted 1.3 percent from the previous three months on an annualised and seasonally adjusted basis.

The central bank's core inflation gauge was expected to rise 1.5 percent for the whole of 2017, unchanged from the previous survey.

According to the latest MAS survey, economists' median forecast for all-items CPI inflation in 2017 was trimmed to 0.9 percent from 1.0 percent.

Economists estimated that the Singapore dollar will trade at 1.4100 against the U.S. dollar by end-2017. It was trading near 1.3820 on Wednesday.

Singapore's advance estimate of second quarter GDP is due to be released in the first half of July.