Thursday September 13, 2012
Economists lower Singapore 2012, 2013 outlook
SINGAPORE: Singapore's trade-dependent economy is likely to expand at a slower pace this year while inflation will probably be higher than what economists were expecting three months ago, according to a central bank survey released yesterday.
Economists now expect the South-East Asian city state's gross domestic product to grow 2.4% this year, down from a median estimate of 3% in the previous poll, the Monetary Authority of Singapore's (MAS) latest quarterly Survey of Professional Forecasters showed.
Economists lowered their estimates for all sectors, with manufacturing now seen growing 2.7% this year compared with the previous estimate of 3%. The outlook for financial services was cut to 1.1% growth from 2.7%.
As for inflation, forecasters polled by MAS now see the consumer price index rising 4.4% this year, up from 4.2% in the previous survey.
However, the outlook for core inflation was lower at 2.5%, from 2.7% three months ago, giving MAS room to loosen policy slightly when it issues its half-year monetary policy statement in mid-October.
Singapore, a key Asian financial centre, saw its economy shrink by an annualised and seasonally adjusted 0.7% in the second quarter compared with the first amid a slowdown in the West and a worsening outlook for the once booming Chinese economy.
The city state is also grappling with inflation due to spiralling rents and car prices, as well as rising wages for low-skilled workers as the government makes its harder for employers to hire foreigners.
Singapore's official forecast is for economic growth of 1.5% to 2.5% this year, with inflation coming in at 4% to 4.5%.
For 2013, the median forecast of economists was for GDP growth of 3.9% and headline inflation of 3.2%, worsening from 4.5% and 3%, respectively, in the previous survey. Reuters