The finance and insurance industry is expected to contribute to economic growth.
Private economists expect Singapore’s economy to grow by 3.3 percent this year, slightly higher than the previous forecast of 3.2 percent in September, revealed the latest survey from the Monetary Authority of Singapore (MAS).
During the third quarter of 2018, the economy expanded by 2.2 percent over the same period last year, slightly higher than the 2.1 percent forecasted in the September survey.M
With this, the construction sector is now expected to contract by only 3.5 percent, a moderation from the 4.2 percent drop predicted in the previous survey.
Growth in the manufacturing sector is also expected to slow to 7.4 percent, down from the 7.6 percent growth forecasted previously.
The finance and insurance industry, on the other hand, is expected to expand by 6.9 percent, up from the 6.7 percent growth forecasted in the last survey.
Meanwhile, respondents expect headline and core inflation for this year to come in at 0.5 percent and 1.7 percent respectively.
“As for the labour market, the respondents expect the unemployment rate to be 2.1 percent at year-end, unchanged from the previous survey,” said MAS.
Respondents cited the easing of trade tensions as a potential upside to the city-state’s growth outlook, while the intensification of US-China trade tensions continue to be a downside risk.
“In addition, a growing number of respondents flagged slower growth in China as a downside risk, on the back of tightening credit conditions. Faster than expected US interest rate hikes, which could trigger financial market turbulence, also continue to be a downside risk for a number of respondents, with the proportion rising from 37 percent in the previous survey to 41 percent,” noted MAS.
Moving forward, respondents expect Singapore’s GDP growth to ease to 2.6 percent next year, a slight change from the 2.7 percent reported in the previous survey. Inflation is forecasted to come in at 1.3 percent and core inflation at 1.8 percent.