Economists cut Singapore's growth forecast for 2017 to 1.8% from 2.1%

Economists cut Singapore's growth forecast for 2017 to 1.8% from 2.1%

Singapore's economic outlook for next year has been pared, according to an official survey of forecasters.

The September survey of professional forecasters, sent out mid-August, by the city-state's central bank, the Monetary Authority of Singapore (MAS), found that economic growth next year was expected to come in at 1.8 per cent next year, down from a forecast for 2.1 per cent growth in the previous survey.

The mostly likely outcome was for the Singapore economy to grow by 1.0-1.9 per cent in 2017, down from the 2.0-2.9 per cent range in the previous survey, the survey said.

The survey, which had 22 respondents, doesn't reflect the MAS' own forecasts.

For this year, economists still expect 1.8 per cent growth, unchanged from the June survey.

"The most likely outcome is for the Singapore economy to grow by between 1.0 to 1.9 per cent this year. This is unchanged from the last survey," the statement said. The economists' forecasts ranged from 1.1 per cent to 2.2 per cent.

But economists now expect the manufacturing sector will grow 0.7 per cent, up from the previous forecast for zero growth. That was offset by expectations the finance and insurance segment would grow 2.0 per cent, down from 2.9 per cent in the previous survey.

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Economists also raised their expectations for private consumption, forecasting it will grow 3.0 per cent this year, up from a forecast of 2.5 per cent growth in the previous survey.

For the third quarter of this year, economists were forecasting gross domestic product (GDP) growth of 1.7 per cent on-year, after second-quarter growth came in at 2.1 per cent, slightly above the 2.0 per cent growth forecast from the June survey.

Economists cut their inflation forecasts for 2016, now expecting price contraction of 0.5 per cent, compared with contraction of 0.4 per cent in the previous survey. Core inflation was expected to come in at 1.0 per cent, up from 0.8 per cent in the previous survey.

The Singapore dollar was also expected to see more strength, with the median forecast now for the US dollar to fetch 1.38 Singapore dollars by the end of the year, compared with the June survey's forecast of 1.40 Singapore dollars.

For the end of the third quarter, forecasts for the US dollar/Singapore dollar pair ranged from 1.331-1.40, with a median forecast of 1.37.

At 11:47 am, the greenback was fetching 1.3469 Singapore dollars.

In its official forecasts, the MAS projects that Singapore's GDP will grow 1-2 per cent in 2016, with inflation forecast in a range of negative 1.0 per cent to zero and core inflation forecast to come at around 1 per cent.

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