Lower 2015 growth forecast for Singapore

Photo: ST

SINGAPORE - Economists have slightly lowered their forecasts for Singapore's 2015 growth and headline inflation compared with three months ago, a central bank survey showed on Wednesday.

The median forecast of 23 economists surveyed by the Monetary Authority of Singapore (MAS) was for gross domestic product (GDP) to expand 2.7 percent this year, down from 2.8 percent growth expected in a survey published in March.

The survey showed that non-oil domestic exports in 2015 is now expected to grow 2.6 percent, up from 1.6 percent in the previous MAS survey.

Economists, however, still lowered their 2015 growth forecast for the manufacturing sector to 0.5 percent, down from 1.8 percent in the previous survey.

The MAS survey showed that economists expect GDP growth in the second quarter to come in at 2.7 percent year-on-year, down from 2.9 percent previously.

In the first quarter, Singapore's economy grew 2.6 percent from a year earlier. That was faster than initially estimated, boding well for the city-state's growth outlook this year.

Still, the Ministry of Trade and Industry has warned of"significant uncertainties and downside risks" to the external outlook, including the risk of a sharp correction in China's real estate market and uncertainties over Greece's future in the euro zone.

The MAS survey shows that economists see the all-items consumer inflation rate at 0.0 percent for this year, compared with 0.1 percent previously.

Core inflation was expected to come in at 1.0 percent in 2015, unchanged from the March survey.

The MAS has said it expects core inflation, which excludes changes in the prices of cars and accommodation and is the focus of monetary policy, to average 0.5-1.5 percent this year.

The central bank has said it sees CPI-all items inflation in 2015 coming in at between negative 0.5 percent and 0.5 percent.

In April, Singapore's central bank surprised markets by holding off from further monetary easing, saying an improving outlook for global growth would underpin the trade-reliant economy.

That came after the MAS in January unexpectedly eased its exchange-rate based monetary policy by reducing the slope of its policy band for the Singapore dollar, while lowering its forecasts for headline and core inflation.