SINGAPORE, Sept 5 – More economists surveyed by the Monetary Authority of Singapore (MAS) now believe trade protectionism, weak external growth and slower growth in China are downside risks Singapore faces.
Concerned by further escalation of trade rhetoric by the United States and its trading partners, as well as the implementation of tariffs, nearly 90 per cent of the 23 economists who responded last month to MAS’ September 2018 survey of professional forecasters cited trade protectionism as a downside risk.
They nonetheless expect the economy to grow by 3.2 per cent this year and by 2.7 per cent next year, in forecasts unchanged from the MAS’ June survey.
Weak external growth was the second most commonly cited downside risk to the Singapore economy, with 42 per cent of respondents highlighting this as a risk factor, compared to just 11 per cent in the previous survey.
Faster-than-expected rate hikes by the US Federal Reserve and slower growth in China on the back of tightening credit conditions were other downside risks cited.
But economists also cited the positive potential of external growth – driven mainly by better performance in the US – for the Singapore economy, alongside any dissipation of trade tensions and the domestic property market.
Manufacturing is still expected to be the main driver of the Singapore economy, with projections that it will grow 7.6 per cent in 2018. The outlook for the construction sector was less positive, with expectations for it to contract by 4.2 per cent.
Core inflation – which excludes private road transport and accommodation costs and is said to be a better measure of underlying price pressures in the economy – is expected to come in at 1.7 per cent, while headline inflation is likely to come in at 0.7 per cent. — TODAY
