Private-sector economists lower Singapore 2019 growth forecast further

PRIVATE-SECTOR economists have further lowered their 2019 growth forecast for Singapore to 2.1 per cent, down from 2.5 per cent, in the Monetary Authority of Singapore's latest quarterly survey of professional forecasters, released on Wednesday.

This is within the Ministry of Trade and Industry's official forecast range of 1.5 to 2.5 per cent, which was lowered in May from the previous range of 1.5 to 3.5 per cent.

The latest survey was sent out in May and received 22 responses. Respondents still thought the most likely growth range was 2.0 to 2.4 per cent, but also saw an increased chance of growth coming in between 1.5 and 1.9 per cent. The probability of growth falling in that range was raised to 33.1 per cent, up from 13.6 per cent in March.

Expectations worsened for all sectors except construction, for which 3.5 per cent growth is predicted, up from the March survey's 2.1 per cent forecast.

Growth forecasts turned negative for manufacturing (-0.2 per cent, compared to 2 per cent previously), wholesale and retail trade (-0.3 per cent, from 1.5 per cent), and non-oil domestic exports (-2.1 per cent, from 1.1 per cent).

The top downside risks remain trade protectionism and a slowdown in China. More respondents are also seeing the possibility of a global downturn, with 29.4 per cent citing it in the latest survey, up from just 5.3 per cent in March.

Correspondingly, an easing of trade tensions and stabilisation of growth in China were two of the top upside risks. A strengthening tech cycle and easing financial conditions were also cited.

Expectations for headline inflation and core inflation both dipped further. Headline inflation is forecast at 0.9 per cent, down from 1.1 per cent in the March survey. Core inflation is expected at 1.4 per cent, down from 1.7 per cent.

As for the labour market, respondents stuck to their expectation of a 2.2 per cent unemployment rate.

While growth is expected to pick up in 2020, respondents' forecasts have been trimmed to 2.3 per cent, from 2.4 per cent in the previous survey.