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Economists cut Singapore 2019 growth forecast to 2.1%: MAS survey

Janet Ong
Finance Editor
A view of the skyline of Singapore October 16, 2018. (PHOTO: REUTERS/Edgar Su)

SINGAPORE — Singapore’s economy is expected to grow 2.1 per cent in 2019, according to the Monetary Authority of Singapore's (MAS) latest quarterly survey of professional forecasters released on Wednesday (12 June).

The forecast is lower than the 2.5 per cent growth that economists and analysts projected in the MAS survey in March. The economy grew 3.2 per cent in 2018.

The expectations come after the Ministry of Trade and Industry in May lowered its gross domestic product (GDP) estimates for this year to between 1.5 and 2.5 per cent from 1.5 to 3.5 per cent previously.

The respondents in the MAS survey cited escalating global trade protectionism as one of the biggest downside risks. Trade frictions are expected to present a downside risk of 94.1 per cent, higher than the 84.2 per cent estimated in the March survey. The other risks are a sharper-than-expected slowdown in China and a global economic downturn.

The respondents lowered their expectations for several sectors including manufacturing, finance and insurance, wholesale and retail trade, and accommodation and food services.

The only sector that is expected to show improvement is construction, with an estimated growth of 3.5 per cent, up from a forecast of 2.1 per cent in March, the survey showed.

Expectations for headline inflation and core inflation by the year-end are lower in the survey. The respondents forecast headline inflation to be 0.9 per cent, down from 1.1 per cent in the March survey, and core inflation is expected to be 1.4 per cent, down from 1.7 per cent previously.

The forecast for the unemployment rate was unchanged at 2.2 per cent.

On the local currency, the Singapore dollar is projected to trade against the greenback at S$1.368, lower than the forecast of S$1.350 in the March survey.

The respondents expect Singapore’s GDP growth to rebound to 2.3 per cent in 2020 versus 2019 - lower than their 2.4 per cent forecast in the previous survey.

The latest survey was sent out to a total of 27 economists and analysts on 21 May and the MAS received 22 responses.

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