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Singapore’s GDP growth outlook stays at 2.5%

Singapore’s GDP growth outlook stays at 2.5%

SINGAPORE: Private sector economists retained their full-year growth forecast for Singapore at 2.5% despite a stronger-than-expected second-quarter performance, as increased optimism about the manufacturing sector was offset by a more negative outlook for construction, accommodation and food services. The Monetary Authority of Singapore’s latest quarterly survey of economic forecasters also showed growing concerns about the situation in the Korean peninsula as well as ongoing fears about protectionism and a slowdown in China. In its report released on Wednesday, MAS said economists expect Singapore’s gross domestic product to expand by 2.5% in 2017 and 2018, with potential upside to their forecasts coming from continued strong growth in electronics products and regional trade.

The overall growth forecasts were unchanged from a previous survey released in June, with 47% of respondents in the latest survey citing geopolitical uncertainty arising from North Korea’s missile tests as a threat to the region’s economy. “A similar number view global trade protectionism as a potential hindrance to growth (while) a possible slowdown in Chinese economic activity was also a concern,” the central bank said. MAS conducted the survey in August after authorities said Singapore’s economy expanded by 2.9% in the second quarter, beating the median forecast of 2.7% by economists polled in the central bank’s June survey. For the whole of 2017, the government expects growth between 2% and 3%, making it the fastest expansion in three years. Singapore’s GDP grew by 1.9% in 2015 and 2.0% in 2016. MAS said it sent out its September survey to 26 economists and analysts who closely monitor the Singapore economy. The report reflects the views of 21 respondents. Notwithstanding their unchanged outlook, purchasing managers’ indexes released this week point to a further upswing in economic activity. The Nikkei Singapore Purchasing Managers’ Index, which tracks the overall economy, rose to 53.2 in August from July’s 51.3, the highest reading since January 2015.