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S'pore economy to grow 3.8% this year: experts
Publication Date : 12-12-2013
Private-sector economists are more bullish on the Singapore economy this year, tipping brighter growth and milder inflation after a stronger-than-expected third-quarter showing.
The experts are also upbeat about next year's prospects but anticipate a faster pick-up in consumer prices. They now expect the economy to expand 3.8 per cent this year, according to a Monetary Authority of Singapore survey out on Wednesday, marginally higher than the previous 2.9 per cent forecast in September.
That average estimate is in the middle of the government's forecast of 3.5 per cent to 4 per cent growth for the year.
The official projection was upgraded last month, from the 2.5 per cent to 3.5 per cent tipped previously.
CIMB economist Song Seng Wun said: "It's a combination of domestic and external factors. There's a brighter global picture, with key leading indicators pointing northwards."
Third-quarter economic output surprised all the experts, coming in at a 5.8 per cent jump from a year earlier, driven by a manufacturing surge.
Economists cited this as the key reason for their more optimistic outlook.
"With a series of good trade and production data recorded in October and November, it's not surprising that the expected growth rate of 2013 is adjusted upwards," said SIM Global Education senior lecturer Tan Khay Boon.
The economists expect gross domestic product to expand by 4.7 per cent in the current quarter, higher than the 3.4 per cent previously forecast.
The 21 respondents polled also expect inflation to come in at 2.4 per cent for this year, down from the 2.5 per cent predicted in the last survey.
They anticipate core inflation, which excludes private cars and accommodation, of 1.7 per cent for the year, just a tad lower than the 1.9 per cent seen previously.
These economists also gazed into their crystal balls for 2014.
They project growth of 3.9 per cent for next year, close to the upper limit of the government's 2014 growth forecast of 2 per cent to 4 per cent.
Song said: "For the man in the street, this means that businesses are still likely to want to hire, and that there are still opportunities for starting businesses and expanding them."
DBS Bank economist Irvin Seah said: "The positive growth momentum from 2013 will spill over into 2014."
Sectors relying on overseas factors such as tourism and manufacturing should continue to do well owing to the stronger external demand, he added.
But Seah also cautioned that a scaling down of the US Federal Reserve's massive monetary stimulus will likely be a key risk factor for the Singapore economy next year.
The economists expect inflation to come in at 2.8 per cent and core inflation at 2.3 per cent for 2014.