Private sector economists raise forecasts for Singapore’s 2025 economic growth

SINGAPORE: Private sector economists have revised their outlook for Singapore’s economic growth, forecasting stronger performance in 2025.

According to the latest Economic Analyst Survey Report by the Monetary Authority of Singapore (MAS), a group of 20 economists now predicts a year-on-year growth of 3.1% in the fourth quarter of this year and 3.6% for the entire year. This marks an improvement from the 2.6% growth projected in the prior survey.

Looking ahead to 2025, the economists estimate a 2.6% growth rate for Singapore’s economy, consistent with earlier expectations. The majority anticipate growth to range between 2.5% and 2.9%.

The survey also revealed a downward revision in inflation expectations. For 2024, the overall inflation rate is now projected to be 2.5%, while core inflation is expected at 2.8%, compared to earlier estimates of 2.6% and 2.9%, respectively. These figures are forecasted to decline further in 2025, with overall inflation at 1.9% and core inflation at 1.8%.

Economists identified several potential risks to Singapore’s economic outlook. Downside pressures include ongoing geopolitical tensions, such as heightened tariffs, weak growth in China, and rising domestic cost pressures.

On the other hand, stronger-than-expected external growth, robust recovery in China, and a sustained improvement in the global technology cycle could present significant upside opportunities.

Survey responses also shed light on expectations for monetary policy. Approximately one-third (33%) of analysts anticipate that MAS may ease the slope of the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) early in 2024. This is a slight decrease from previous survey figures. Meanwhile, 38% of respondents continue to expect such a policy adjustment in April 2024.