Analysts Raise Singapore Q3 GDP View, but 2017 Outlook Steady: MAS

Police in Singapore have arrested a man suspected of planning to join Islamic State-linked fighters in the Philippines and a woman who was in contact with foreign militants, the government said in Thursday (07/09). (Reuters Photo/Edgar Su)

By : Masayuki Kitano | on 7:00 AM September 07, 2017
Category : International, SE Asia

Singapore. Economists have raised their forecasts for Singapore's economic growth in the third quarter, with manufacturing activity likely to remain solid after a strong first half, a central bank survey showed on Wednesday (06/09).

The quarterly survey by the Monetary Authority of Singapore (MAS), however, showed no change in the economists' median forecasts for full-year growth in 2017 and also for 2018, compared to three months ago.

Singapore's gross domestic product is expected to grow 2.5 percent in both this year and also next year, according to the median forecast of 21 economists surveyed by the MAS.

The economists' views on 2017 GDP growth are in line with what the government now expects.

In August, the Ministry of Trade and Industry said that full-year 2017 GDP growth should come in at around 2.5 percent, and revised its official 2017 growth forecast to a range of 2.0 to 3.0 percent from 1.0 to 3.0 percent previously.

The MAS survey's median forecast for year-on-year GDP growth in the third quarter rose to 3.1 percent, up from the previous median of 2.8 percent.

The manufacturing sector was expected to grow 8.3 percent in the July-September quarter from a year earlier, the MAS survey showed.

Singapore's trade-reliant economy has gained a big boost this year from an improvement in global demand, particularly for electronics products and components such as semiconductors.

In the second quarter, Singapore's GDP increased 2.9 percent from a year earlier, with manufacturing expanding 8.1 percent. Second-quarter GDP grew 2.2 percent from the previous three months on an annualized and seasonally adjusted basis.

Economists also made no big changes to their inflation forecasts.

Economists expect the central bank's core inflation gauge to rise 1.6 percent for the whole of 2017, the MAS survey showed, up from 1.5 percent previously. They trimmed their forecast for core inflation in 2018 to 1.6 percent from 1.7 percent.

According to the latest MAS survey, economists' median forecast for all-items CPI inflation in 2017 was lowered to 0.8 percent from 0.9 percent. Their forecast for headline inflation in 2018 was unchanged at 1.4 percent.

Economists estimated that the Singapore dollar will trade at 1.380 US dollar by end-2017. It was trading near 1.3530 on Wednesday.

Singapore's advance estimate of third-quarter GDP and the central bank's twice-yearly monetary policy decision, are both due to be announced in October.

The prevailing expectation among analysts has been that the MAS will keep its exchange-rate based policy settings unchanged in October, since there has been little sign of any broad pick-up in demand-led inflationary pressures despite the improved growth prospects this year.


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