The Singapore economy is expected to expand by 2.4% in 2024, according to the economists and analysts who responded to the Monetary Authority of Singapore’s (MAS) March 2024 survey of professional forecasters.
This is slightly higher than the 2.3% estimate in the December survey. Among the segments, manufacturing, finance & insurance and construction are expected to see higher y-o-y growths, while wholesale & retail trade as well as accommodation & food services are expected to see lower y-o-y expansions.
The rest of the segments, as well as Singapore’s non-oil domestic exports (NODX) remain unchanged.
In the current survey, the respondents also expect the economy to grow by 2.6% y-o-y in 1Q2024 after Singapore’s GDP expanded by 2.2% y-o-y in 4Q2023, above the respondents’ median forecast of 1.8% in the December survey.
Based on the mean probability distribution, the Singapore economy is most likely to grow by 2.0% to 2.4% in 2024 with an average probability of 36%. This is followed closely by the 2.5% to 2.9% forecast range, with a probability of 31%. In the previous survey, the respondents similarly assigned the highest probability to growth outturns of between 2.0% to 2.9%.
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The median forecast for CPI-All items — or headline inflation — for 2024 is 3.1%, lower than the 3.4% estimate seen in the December survey. The median forecast for MAS core inflation remains unchanged at 3.0% for the year.
The respondents also expect Singapore’s unemployment rate to be at 2.1% at the end of the year.
In 1Q2024, the respondents expect headline and core inflation to come in at 3.6% and 3.4% respectively. Singapore’s headline inflation for 4Q2023, at 4.0%, stood within the respondents’ expectations.
In the March survey, the respondents project that both headline inflation and core Inflation in 2024 will most likely come in between 3.0% and 3.4%. In the December survey, respondents assigned the highest probability to the 3.5% to 3.9% range for Singapore’s headline inflation and 3.0% to 3.4% for core inflation.
In 2024, tighter global financial conditions were cited as the main factor that could potentially weigh on the financial market and lending conditions in Singapore. Elevated inflation, rising geopolitical tensions, spillovers from China and global real estate market stresses were also flagged as risks.
At the same time, possible upside drivers of domestic financial market and lending conditions were less restrictive global financial conditions including rate cuts by major central banks as well as spillovers from a stronger Chinese economy.
Meanwhile, spillovers from external growth slowdown and geopolitical tensions emerged as the most cited downside risks to the domestic outlook. The spillovers from a slowdown in external growth was flagged as the top downside risk. Inflationary pressures and spillovers from weaker growth in China were also seen as downside risk factors.
Better-than-expected external growth was the most frequently cited upside risk to Singapore’s outlook, identified by 71% of respondents. Respondents also flagged faster-than-expected tech cycle recovery and more robust growth in China, with the former being ranked as the top upside risk.
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On MAS monetary policy, most of the respondents don’t expect to see changes to the slope, width and level of the Singapore dollar nominal effective exchange rate (S$NEER) policy band in the upcoming April 2024 review.
However, 14% of the respondents anticipate a reduction in the slope of the policy band in the July review while 30% of the respondents expect the same in the October review.
Around 5% of respondents predicted a lowering of the level at which the S$NEER policy band is centred across the July and October reviews.
2025 estimates
Singapore’s GDP is tipped to expand by 2.5% in 2025 with the most probable outcome for growth falling between 2.5% and 2.9% with an average probability of 33%.
Both headline and core inflation are expected to come in at 2.0% in 2025 with the respondents assigning the highest probability to the 2.0% to 2.4% range for both figures.
