Singapore economy seen growing 3.9% next year: Survey

PHOTO: Singapore economy seen growing 3.9% next year: Survey

SINGAPORE - Singapore's economy is likely to expand at a slightly faster pace of 3.9 per cent next year as exports recover, a central bank survey of forecasters released on Wednesday showed.

The median forecast of 21 economists surveyed by the Monetary Authority of Singapore (MAS) was that the wealthy Southeast Asian city-state's non-oil domestic exports will grow by 5.4 per cent next year, turning around from an expected contraction of 3.9 per cent this year.

The expected rise in Singapore's gross domestic product (GDP) next year - an improvement over the 3.8 per cent growth forecast for 2013 - is at the top end of the government's 2-4 per cent forecast for 2014.

The latest growth forecasts by economists were also a lot higher than in a previous MAS survey carried out three months ago.

Singapore's non-oil domestic exports have been in the doldrums for two years, mainly due to soft global demand and weakness among makers of computer parts and disk drive components. But the electronics sector appears to be on the mend, with output surging 22.8 per cent in October from a year ago.

Inflation, however, is also likely to pick up next year, with economists forecasting a median 2.8 rise in the consumer price index (CPI) next year, with core inflation seen at 2.3 per cent.

The forecasts of higher inflation are consistent with central bank comments last month that the pace of price increases is expected to pick up over the next few quarters before tapering off towards the end of 2014.

MAS said it expects headline and core inflation to average 2-3 per cent next year.