Economists slightly lowers Singapore growth forecast to 3.5%; 6 in 10 expect no policy change in July: MAS survey

SINGAPORE: Economists polled by the Monetary Authority of Singapore (MAS) have slightly lowered Singapore’s growth forecast for the year to 3.5%, from 3.6% in the previous survey.

Six in 10 (62%) expect monetary policy to remain unchanged next month, while 38% expect policy tightening.

Nearly nine in 10 respondents (85%) cited the escalation or prolonging of the Middle East conflict as a downside risk to Singapore’s economic outlook, with seven in 10 identifying it as a top risk. Six in 10 also flagged the potential bursting of the AI bubble, while 15% saw it as a top risk.

The survey was sent to 25 economists and analysts closely monitoring the Singapore economy on May 25, with 22 of them responding, before the ceasefire agreement was signed by the United States and Iran on June 14.

In the first quarter, the economy expanded by six per cent year-on-year (YoY), slightly exceeding the previous survey’s median forecast of 5.8%. Respondents expect the economy to grow by 4.3% YoY in the second quarter.

For next year, the growth rate forecast remained unchanged at 2.5%.

The median forecast for core inflation and headline inflation in the June survey stood at 2 per cent and 2.3% respectively, higher than the 1.5% forecast for both in the previous survey.

In terms of the unemployment rate, respondents expect it to remain unchanged at 2.1%. 

MAS will deliver its next monetary policy review in July. /TISG

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