Economists raise Singapore’s 2024 growth forecast in MAS survey

By Amanda Lee

SINGAPORE — Experts surveyed by Singapore’s central bank have raised their economic growth forecast for 2024, expecting faster growth in some industries including the financial and construction sectors.

The median forecast of economists and analysts for 2024 gross domestic product growth is 2.6%, according to the Monetary Authority of Singapore’s September survey released on Wednesday. That’s up from the previous quarterly survey, which forecast a 2.4% expansion.

Survey respondents forecast wholesale and retail trade will grow 3.0% this year, up from 2.5% in the June survey, and construction will grow 3.9%, up from 3.8% forecast earlier. They expect financials and insurance to grow 5.7% this year, up from 5.1% expansion forecast earlier, and the country’s non-oil exports will rise 3.0% this year, up from 4.0% expansion forecast in the June survey.

MAS survey respondents predict Singapore’s GDP will grow by 2.5% in 2025, unchanged from the previous survey.

The survey found that the most frequently cited downside risks to Singapore’s economic health include slowing economic growth and the impact of geopolitical tensions, including higher US tariffs and weaker growth in China.

On the other hand, the most frequently cited risk to Singapore’s outlook was better-than-expected external growth, while other key risks included stronger growth in China and a faster-than-expected recovery in the technology cycle.

Inflation is expected to fall this year, with headline inflation expected to come in at 2.6%, down from the previous forecast of 2.8%, while core inflation is expected to come in at 2.9%, down from the previous forecast of 3.0%.

A majority of respondents said they expected no change in the slope, width and level of the Singapore dollar nominal effective exchange rate policy band at the upcoming October review. For the January and April 2025 policy reviews, 50% and 35% of respondents, respectively, expected the slope of the S$NEER policy band to decrease, the survey found.

The central bank’s monetary policy focuses on Singapore’s exchange rate, which it sees as an effective tool for maintaining price stability in the small and open economy.

The MAS said the September survey was sent to 25 economists and analysts, of which 21 responded. It said the survey results do not reflect the views or forecasts of the central bank.

Write to Amanda Lee at [email protected]

(END) Dow Jones Newswires

September 11, 2024, 00:14 ET (04:14 GMT)