Economists trim 2016 and 2017 Singapore growth forecasts: MAS survey

SINGAPORE - Economists trimmed their forecasts for Singapore's 2016 and 2017 growth, while downgrading their views on exports as well as private consumption for this year, a central bank survey showed on Wednesday.

The median forecast of 22 economists surveyed by the Monetary Authority of Singapore ( MAS) was for gross domestic product (GDP) to grow 1.8 per cent in 2016, down from the 1.9 per cent expected in the previous survey published in March.

The median forecast for GDP growth in 2017 was also lowered to 2.1 per cent, down from 2.5 per cent in the previous survey.

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

Economists' median forecast for non-oil domestic exports was for a contraction of 2.1 per cent in 2016, down from the previous forecast for growth of 0.2 per cent.

In late May, Singapore slashed its export forecasts for this year after the trade-reliant economy barely grew in the first quarter, heightening uncertainty over the economic outlook.

The median forecast for private consumption was cut to 2.5 per cent growth this year, from 3.2 per cent growth in the previous survey.

The manufacturing sector was not expected to grow at all this year, still an improvement from the previous median forecast for a contraction of 2.7 per cent.

Economists also lowered their forecasts on the all-items consumer price index (CPI). However, they kept unchanged their outlook for core inflation, which is seen as the focus of the central bank's monetary policy.

The headline consumer inflation rate was seen at -0.4 per cent year-on-year in 2016, down from -0.2 per cent in the March survey.

Core inflation was expected to come in at 0.8 per cent in 2016, unchanged from the previous central bank survey.

In 2017, all-items CPI was expected to rise to 1.0 per cent, while core inflation was seen edging up to 1.2 per cent, according to the latest MAS survey.

Economists expect the Singapore dollar to trade at S$1.40 against the US dollar at end-2016. It was around S$1.35 on Wednesday.