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Private-sector economists raise Singapore’s 2021 growth forecast to 6.5%: MAS survey
PRIVATE-SECTOR economists have further raised their growth forecast for 2021 to 6.5 per cent, according to the Singapore central bank’s survey of professional forecasters on Monday.
In the previous survey released in March, economists had predicted a full-year growth of 5.8 per cent.
This June survey is based on the views of 24 respondents polled by the Monetary Authority of Singapore.
The report noted that Singapore’s first-quarter gross domestic product (GDP), at 1.3 per cent, was stronger than respondents’ forecast of a 1.1 per cent contraction in the previous survey.
As for the second quarter, economists are expecting an expansion of 15 per cent year on year, coming off the low base during last year’s Q2, when Singapore was in the midst of a “circuit breaker”, or partial lockdown.
The optimism largely extends from their bullish views of manufacturing and non-oil domestic exports, with the former now expected to expand 8.3 per cent instead of 4.7 per cent in 2021, and the latter, 7.5 per cent instead of 6.9 per cent.
Construction is now expected to grow 19.3 per cent, slightly lower than the 22.5 per cent expansion predicted in the earlier survey.
Meanwhile, GDP is projected to grow 4 per cent in 2022, according to the respondents.
Economists believe headline inflation could reach 1.4 per cent, up from their earlier prediction of 0.9 per cent. Core inflation, which excludes accommodation and private road transport costs, is set to hit 0.8 per cent, up from 0.7 per cent in the previous survey.
Q2 could meanwhile see headline and core inflation at 1.9 per cent and 0.7 per cent respectively.
The labour market is also expected to continue its recovery, with respondents expecting unemployment rate to reach 2.7 per cent by year-end, down from 2.9 per cent in the March survey.
However, a further deterioration of the Covid-19 pandemic remains respondents’ most-cited downside risk, with 82.4 per cent of them identifying it. This is lower than in March, when it was cited by 94.4 per cent of respondents.
Geopolitical tensions is another concern, with 47.1 per cent citing this as a risk, down from 50 per cent in March.
More economists appear to consider the slower-than-expected labour market recovery a downside, since it was identified by 29.4 per cent of respondents, up from 22.2 per cent previously.
On the flip side, effective containment of Covid-19 was the most frequently-cited upside risk to Singapore’s growth outlook, with 83.3 per cent, up from 77.8 per cent, citing it.
More respondents also flagged the stronger-than-expected manufacturing sector performance as a possible upside – 61.1 per cent cited this, up from 50 per cent in the March survey.
The prospect of reopening borders was also identified as a possible upside by 44.4 per cent of respondents, same as in the previous survey.
Source: https://www.businesstimes.com.sg/government-economy/private-sector-economists-raise-singapores-2021-growth-forecast-to-65-mas-survey