"Add Singapore's ageing population and the household debt overhang to a lacklustre and tricky external environment, all of which form a recipe for weaker growth potential, Singapore will have to be content with little victories, such as our modestly positive 2017-2018 growth outlook, in the years to come."
Nevertheless, Deutsche Bank sees Singapore on a path of "mild recovery" through the medium-term, as it foresees exports growth creeping marginally higher - despite the drag from China.
"Our baseline scenario, where advanced economies are expected to marginally grow faster through 2018 despite a slowing China, is set to guide Singapore's merchandise exports a tad stronger, rising towards 2 per cent in real terms in 2018 from one per cent in 2016 year to date."
At the sector level, it expects electronics and precision engineering to be most vulnerable to a pullback in foreign investments.
This is especially given the threat of "de-globalisation" from a Donald Trump presidency.
However, the real estate and offshore & marine sectors are expected to bottom out in 2017.
At the same time, the report said Singapore Inc is due for restructuring, amid heightened competition from its regional peers.
"Singapore Inc, especially Temasek-linked companies, was once a success story in the region with a number of them being leaders in their respective sectors.
Most recently, however, Singapore Inc has lagged behind due to technology disruptions and intensified competition from regional players," the bank said.
Singapore's technology and productivity drive - together with the change in return assessment for Temasek - could see the next phase of rebuilding Singapore Inc, it said.
As for its top company picks, Deutsche Bank said its focus is on companies that are better positioned in a technology-savvy environment, or ones that could see better capital management and restructuring potential.
It singled out CapitaLand, DBS, SATS, SingTel, and SingPost.
This article was first published on December 09, 2016.
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