Private-sector economists are a little less optimistic about Singapore’s economic growth this year than they were three months ago.
According to the latest quarterly survey of 21 professional forecasters by the Monetary Authority of Singapore, they expect full year growth to come in lower at 5.5 per cent.
The new forecast is a slight downgrade from the 5.6 per cent estimate in the last survey in March. However, it is still at the high end of the government’s target of four to six per cent growth.
Song Seng Wun, Regional Economist, CIMB-GK Research, said: “For the full year, we believe that there are certain sectors and industries which may still provide the lift for overall growth. For instance, the construction sector – though faced with rising costs – it’s still probably going to do reasonably well, with double digit growth.
“And within the services sector itself, we have seen some moderation (in) activities, but we are still seeing enough activities going on to give some sort of decent growth.”
For the second quarter alone, the forecast is for growth to come in at 4.7 per cent, better than the 4.4 per cent forecast given in the previous survey.
But inflation is still pushing higher to as much as 7.5 per cent, primarily on the back of rising oil and food prices. Still, it is expected to ease in the third quarter.
David Cohen, Director, Asian Economic Forecasting, said: “We’ll get a little bit of relief in the third quarter, when the year-on-year comparison will be a little more generous because it will have already included the sales tax increase last July, so the year-on-year comparison won’t be inflated anymore.”
For the whole year, inflation is seen hitting six per cent. That’s higher than the forecast of five per cent in the previous survey three months ago.
Some economists said they see enough momentum for the Singapore economy to keep growing, especially since the US slowdown has so far not been as deep as earlier feared. – CNA/vm
Source : Channel NewsAsia – 16 Jun 2008