Economists cut 2016 Singapore growth forecast for 2016 to 1.9%: MAS survey

SINGAPORE - Economists lowered their forecasts for Singapore's 2016 growth and inflation compared with three months ago, while downgrading their view on exports and manufacturing activity, a central bank survey showed on Wednesday.

The median forecast of 24 economists surveyed by the Monetary Authority of Singapore (MAS) was for gross domestic product (GDP) to grow 1.9 per cent in 2016, down from 2.2 per cent expected in the previous MAS survey published in December.

"As reflected by the mean probability distribution, the most likely outcome is for the Singapore economy to grow by between 1.0 to 1.9 per cent this year, below the 2.0 to 2.9 per cent range reported in the last survey," the MAS said.

The government now expects full-year GDP growth of 1.0-3.0 per cent this year.

Economists' median forecast for non-oil domestic exports was growth of 0.2 per cent for all of 2016, down from the previous forecast of a 1.5 per cent expansion.

The manufacturing sector was seen likely to shrink 2.7 per cent in 2016, worse than the previous median forecast of a 1.2 per cent contraction.

The MAS survey showed that economists expect GDP growth in the first quarter to come in at 1.6 per cent year-on-year, down from 1.8 per cent expected in the previous survey.

Singapore's advance estimate of January-March GDP is due to be released in April. In the fourth quarter of 2015, GDP expanded 1.8 per cent year-on-year, while expanding at an annualised 6.2 per cent from the previous quarter.

Economists also lowered their inflation forecasts for 2016, according to the median forecasts in the MAS survey.

The headline consumer inflation rate was seen at -0.2 per cent year-on-year in 2016, down from 0.5 per cent in the December survey.

MAS core inflation, the focus of monetary policy, was expected to come in at 0.8 per cent in 2016, down from 1.0 per cent expected in the previous survey.

In February, Singapore lowered its headline inflation forecast for 2016 to -1.0 per cent to 0.0 per cent after a collapse in global oil prices. The previous official forecast had been -0.5 per cent to 0.5 per cent.

The MAS, however, has kept its 2016 forecast for core inflation unchanged at 0.5 per cent to 1.5 per cent.

Economists expect the Singapore dollar to trade at S$1.45 against the US dollar at end-2016, the MAS survey showed.