SINGAPORE, Sept 7 — Economists are more optimistic about the outlook for Singapore’s economy next year, with a survey showing that on average, they expect growth of 5.5 per cent in 2021, the Monetary Authority of Singapore (MAS) said today.

This is higher than the 4.8 per cent growth for 2021 that they had forecast when last surveyed in June.

Overall, the 28 economists who responded to the MAS survey gave economic growth forecasts of between 4 per cent and 5.9 per cent for 2021.

But while they are more optimistic about next year, they are slightly more pessimistic about this year. 

They now expect the economy to contract by 6 per cent as a whole this year. In June, they had forecast a 5.8 per cent decline for the whole year. 

This is because they expect sharper contractions in two badly-battered industries: They now forecast the construction sector to decline by 23 per cent, and the accommodation and food services sector to contract by 29.1 per cent this year.

In the previous survey in June, they had predicted declines of 11.4 per cent and 26 per cent for both sectors respectively. 

In the latest survey, the economists also said they expect the economy to contract by 7.6 per cent in the third quarter compared with the same period last year.

In the second quarter, the economy had shrunk by 13.2 per cent from the same period last year, a sharper drop than economists’ forecast of an 11.8 per cent decline.

Risks to the outlook for Singapore economy     

According to the economists, the top risk to Singapore’s growth outlook is a further deterioration of the Covid-19 situation, with 90 per cent of respondents citing it and 75 per cent ranking it as the top risk. 

The escalation of tensions between the United States and China was also identified by 60 per cent of respondents as a risk, up from 55.6 per cent in the previous survey. 

Respondents were also concerned with a slower-than-expected global economic recovery, with 25 per cent identifying this as a risk, up from 16.7 per cent in the previous survey. 

Conversely, the respondents said that the Singapore economy could perform better than expected if there is to be a containment of the Covid-19 pandemic, stronger-than-expected manufacturing performance and an easing of US-China tensions. — TODAY