SINGAPORE: In the most recent survey of professional forecasters from the Monetary Authority of Singapore (MAS), economists increased Singapore’s growth forecast to 2.4 per cent, slightly higher than the previous forecast of 2.3 per cent.
The survey, released every quarter, was published by MAS on Wednesday (Mar 13). It also showed that the forecasters predict headline inflation for this year to be at 3.1 per cent. The previous forecast had been at 3.4 per cent.
Their forecast for core inflation, which excludes the price of food and fuel, however, remains unchanged at 3.0 per cent.
The March 2024 survey took into account the views of 23 economists and analysts but doest not reflect of the forecasts and views of MAS itself.
The survey’s participants predict that Singapore’s Gross Domestic Product (GDP) to expand by 2.5 per cent in 2025. On the labour front, the economists and analysts surveyed forecast the unemployment rate to be at 2.1 per cent at the end of the year.
As for the factors that could affect financial market and lending conditions in Singapore, they said that tighter global financial conditions could be the primary driver. Higher inflation rates, tensions around the globe, China’s economic situation, and stresses to the global real estate market were also named as risks to financial market and lending conditions.
However, they also named less restrictive global financial conditions (which include rate cuts by major central banks) and spillovers as China’s economy grows stronger as potential positive drivers of the local financial market and lending conditions.
“Spillovers from external growth slowdown and geopolitical tensions emerged as the most cited downside risks to the domestic outlook, with the former ranked as the top downside risk,” MAS said in its report.
Mr Chua Han Teng, a DBS Bank economist, is quoted in The Straits Times as saying that while his expectation is for the GDP this year to be 2.2 per cent, “Yet we think the improvement will likely be fragile amid global economic uncertainties from high interest rates in advanced economies, bumpy conditions in China and lingering geopolitical risks that could disrupt supply chains.”
Earlier this week, economists raised Singapore’s GDP forecasts, with some saying it was due to Taylor Swift’s Eras Tour concerts.
According to a Bloomberg survey, gross domestic product (GDP) likely expanded by 2.9 per cent in the three months ending March 31, marking the fastest pace in six quarters.
The Business Times reported that the increase in growth also led economists to revise their annual growth expectations, now anticipating a 2.5 per cent increase compared to the previously projected 2.3 per cent.
This places Singapore’s growth towards the upper end of the government’s forecast range of 1 per cent to 3 per cent for this year. /TISG