SINGAPORE (Mar 13): The Singapore economy is expected to expand by 1.9% y-o-y in 1Q19, according to the March survey of professional forecasters by the Monetary Authority of Singapore (MAS).
This is lower than the 2.4% forecast in the December 2018 survey.
For 2019, GDP growth is expected to come in at 2.5%, a slight downgrade from the previous survey.
Based on mean probability distribution, the most likely outcome is for the Singapore economy to grow by between 2.0% and 2.9% this year, with respondents assigning almost equal probabilities to the ranges of 2.0–2.4% and 2.5–2.9%.
This is in contrast to the December 2018 survey, in which a higher probability was assigned to the 2.5–2.9% range.
For 2020, GDP growth is expected to hit 2.4%. Based on mean probability distribution, the respondents, on average, estimate 2.0–2.4% to be the most likely growth outcome for the Singapore economy next year.
The March survey was sent out by MAS to a total of 28 economists and analysts who closely monitor the Singapore economy. The report reflects the views received from 23 respondents and does not represent MAS’s views or forecasts.
For 1Q19, CPI-all items inflation and MAS core inflation are expected to come in at 0.6% and 1.7%, respectively. For 2019 as a whole, they are forecast to be 1.1% and 1.7%, respectively, down from 1.3% and 1.8% in the December 2018 survey. As for the labour market, the respondents expect the unemployment rate to be 2.2% at year-end, slightly higher than in the previous survey.
Among the top risk factors highlighted, the majority of respondents noted that an easing of trade tensions between China and the US could contribute towards a stronger-than-expected growth turnout for Singapore. The proportion of respondents who identified this as an upside risk to their forecasts was 74%, substantially higher than in the previous survey.
Stronger growth in China resulting from fiscal and monetary stimulus also emerged as a likely upside, with 37% of forecasters citing it in their responses, up from 24% in December 2018.
A similar number of respondents also included in their lists a pause in monetary policy tightening in developed economies, which was a slight increase from 29% in the previous survey.
Reflecting recent developments in trade relations between China and the US, a smaller share of respondents identified trade protectionism as a key downside concern, though the proportion remains high at 84%.
A hard landing in China, possibly exacerbated by inadequate policy responses, was also frequently brought up as a downside scenario. In addition, many respondents cited higher global interest rates, brought about by inflationary pressures and resumption of monetary policy tightening, as one of their top downside risks, though the proportion fell slightly from 41% to 32%.
