Singapore economy expected to grow by 3.1% in Q3: economists
Singapore
PRIVATE sector economists expect Singapore's economy to grow by 3.1 per cent in the third quarter of 2017, according to a poll of economists and analysts by the Monetary Authority of Singapore (MAS).
For the full-year of 2017, the analysts maintained their growth forecast of Singapore's gross domestic product (GDP) at 2.5 per cent, unchanged from the previous survey.
Of the key macroeconomic indicators for 2017, non-oil domestic exports are expected to clock the highest growth of 7.4 per cent, up from 5.6 per cent in the June survey.
Manufacturing comes next with projections of continued improvement to 6.6 per cent growth - up from economists' earlier forecast of 5 per cent.
CIMB economist Song Seng Wun said the 2.5 per cent forecast for full-year GDP growth is cautious as analysts are unsure if the manufacturing strength is sustainable. But he thinks it is. "I'm talking to people on the ground related to the industry, it looks like it is on a new growth cycle led by firm demand from defence, people-related, consumer, AI (artificial intelligence), security.
"It looks like we will probably continue to see manufacturing being led by technology over the medium term. We will see how things pan out."
The latest Purchasing Managers' Index (PMI) for Singapore's manufacturing sector rose for the 12th consecutive month, posting the highest reading since November 2014, as electronics production quickens. The August print was an increase of 0.8 point from the previous month, with almost all indicators showing improvements, except supplier deliveries.
The MAS September survey, which reflects the views of 21 respondents, showed that the Singapore economy is most likely to grow by 2-2.9 per cent in 2017, unchanged from the previous survey in June, based on the mean probability distribution.
Mr Song said: "Overall, some segments are still doing a lot better than others. There are still some drags, but I think largely we are seeing that the drags are getting smaller."
For Q3, headline inflation and core inflation are expected to come in at 0.7 per cent and 1.7 per cent, respectively.
For the year, the median CPI-all items inflation forecast edged down slightly to 0.8 per cent from the 0.9 per cent reported in the last survey. Respondents expect core inflation to edge up to 1.6 per cent in 2017, from the previous 1.5 per cent.
Unemployment rate has been lowered to 2.2 per cent at year-end, from 2.4 per cent.
