SINGAPORE, Mar 20: Singapore’s economy will likely grow at a slightly faster pace this year than expected earlier, helped by a pick-up in manufacturing and financial services, a central bank survey released on Wednesday showed.
Singapore, a wealthy city-state of 5.3 million people, twice came close to falling into recession last year as global demand for electronics plunged and weak financial markets took a toil on investment banks.
The electronics industry has shown signs of stabilising, however, with a key semiconductor industry gauge turning positive in January and U.S. Retail sales expanding at their fastest clip in five months in February.
Economists now expect Singapore’s gross domestic product (GDP) to grow 2.8 percent this year, slightly higher than the median estimate of 2.7 percent in the previous poll, according to the Monetary Authority of Singapore’s (MAS) latest quarterly Survey of Professional Forecasters.
The bulk of growth is likely to come in the second half of the year, however, with economists forecasting 0.8 percent year-on-year growth for the first three months of 2013.
Singapore’s economy expanded by 1.3 percent last year, hurt by tepid growth in manufacturing and financial services of just 0.1 percent and 0.5 percent, respectively. For 2013, the median estimate of economists is for manufacturing to expand by 3.3 percent and financial services to grow by 3.0 percent.
Manufacturing contributes to around 20 percent of Singapore’s GDP while financial services account for about 12 percent.
Meanwhile, inflation is likely to dip to 3.8 percent this year, unchanged from the previous survey, but down from 2012’s 4.6 percent.
MAS conducts its survey every quarter after the release of economic data for the preceding three-month period. The median forecasts in the latest report were based on the estimates of 21 economists.
Singapore’s official forecasts are for growth of 1-3 percent this year and inflation of 3.5 to 4.5 percent.
Most economists expect Singapore will face several years
Of slow growth and relatively high inflation as the government reins in immigration amid a backlash from locals unhappy about crowded trains and competition for jobs that has depressed wages at the lower end.
To help keep inflation in check, MAS is likely to persist with its policy of letting the Singapore dollar rise against the currencies of its main trading partners.
According to the MAS survey, the Singapore dollar is likely to end the year at 1.200 to the dollar, strengthening from current levels of around 1.250.
2013 December Current
(year-on-year percentage survey* survey*
Change except for exchange
Rate)
GDP 2.7 2.8
– manufacturing 3.0 3.3
– finance and insurance 2.5 3.0
Non-oil domestic exports 4.3 4.0
CPI (all items) 3.8 3.8
MAS core inflation 2.2 2.0
Unemployment (end-period) 2.0 2.0
Exchange rate (SGD per USD) 1.200 1.200
Bank loans 11.9 14.8
*Median Estimates
For full details, please check www.Mas.Gov.Sg (AGENCIES)
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