The Singapore economy is expected to expand by 2.6% in 2024, according to economists and analysts polled by the Monetary Authority of Singapore (MAS). The current survey released on Sept 11 reflects an increase from the estimate of 2.4% published in the previous survey in June.
The survey was sent to 25 economists and analysts, of which 21 responded.
In September, there were higher forecasts for finance & insurance, construction and wholesale & retail trade sectors. Market-watchers expect a 5.7% y-o-y change in the finance & insurance sector, an increase from the 5.1% y-o-y previously. In the construction sector, there is a median forecast of 3.9% y-o-y, up from 3.8% previously. The wholesale & retail trade is expected to experience a 3.0% y-o-y change compared to 2.5% y-o-y in June.
In 3Q2024, the Singapore economy is expected to grow by 2.6% y-o-y. In 2Q2024, the Singapore economy expanded by 2.9% y-o-y, exceeding the median forecast of 2.7% in the previous survey.
Expectations for non-oil domestic exports (NODX) dipped to 3.0% from 4.0%, while private consumption is expected to experience a 5.5% y-o-y change, an increase from the previous 3.4%.
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According to the mean probability distribution, the Singapore economy is most likely to grow by 2.5% to 2.9% this year, with an average probability of 39%. This is followed by the 2.0% to 2.4% forecast range, with a probability of 26%. This marks an increase from the previous survey where market-watchers had assigned the highest probability to growth outturns of between 2.0% to 2.4%.
In the 3Q2024, market-watchers expect CPI-All items (headline inflation) and MAS core inflation to come in at 2.4% and 2.9% respectively. The headline inflation and MAS core inflation came in at 2.8% and 3.0% y-o-y in 2Q2024, aligned with the respondents’ forecasts in the previous survey.
In 2024, the median forecast for headline inflation is 2.6%, down from 2.8% in the June survey. The median forecast for MAS core inflation is 2.9%, down from 3.0% in the previous survey.
The respondents have assigned the highest probability to the 2.5% to 2.9% range for headline inflation, similar to the survey in June. For MAS core inflation, the highest probability was also assigned to the 2.5% to 2.9% forecast range, compared to the 3.0% to 3.4% in the previous survey.
The unemployment rate is expected to be at 2.1% year-end.
2025 estimates
Market-watchers estimate that Singapore’s GDP will expand by 2.5% y-o-y. Their forecast of the most probable outcome for growth fell between 2.5% and 2.9%, similar to the previous survey. However, the average probability is 33%, a decrease from the 34% previously.
Singapore’s headline inflation and MAS core inflation are expected to come in at 2.0% in 2025. The respondents have assigned the highest probability to the 2.0% to 2.4% range for both headline and MAS core inflation.
Outlook
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A slowdown in external growth has been identified as the most cited downside risk to domestic outlook. Additionally, respondents also raised spillovers from geopolitical tensions, including higher US tariffs and weaker growth in China.
Better-than-expected external growth was the most frequently cited upside risk to Singapore’s outlook, identified by 73% of the respondents. More robust growth in China and faster-than-expected tech cycle recovery were also flagged as key upside risks.
On MAS monetary policy, majority of the respondents do not expect changes to the slope, width and level of the Singapore dollar nominal effective exchange rate (S$NEER) policy band in the October 2024 review. For the January and April 2025 policy reviews, 50% and 35% of respondents, respectively anticipate a reduction in the slope of the S$NEER policy band.
