Economists see slower growth for Singapore in 2019: MAS poll

Economists expect Singapore’s gross domestic product (GDP) growth to ease to 2.6 per cent in 2019 from a projected 3.3 per cent in 2018, the latest quarterly survey by the Monetary Authority of Singapore (MAS) showed on Wednesday (12 December).

Rising trade protectionism remains a key concern, according to the MAS poll of 23 economists and analysts. All respondents cited worsening US-China trade tensions as a downside risk to the Singapore economy, compared with 89 per cent of respondents in the September poll.

In addition, a growing number of respondents flagged slower growth in China as another risk factor, due to tightening credit conditions. Faster than expected US interest rate hikes could also curb growth for 41 per cent of the respondents, up from 37 per cent in the previous survey .

The manufacturing sector is also forecast to experience slower growth. Respondents expect manufacturing growth to ease to 3 per cent in 2019 from an estimated 7.4 per cent in 2018. Growth in the finance and insurance sector could drop to 5.4 per cent in 2019 from 6.9 per cent in 2018.

The MAS survey was sent out on 22 November, before the US and China agreed on 1 December to a 90-day truce to work out their trade differences.

Growth in non-oil domestic exports is expected to fall to 2.9 percent in 2019 from 6.2 per cent in 2018.

The respondents also cut their expectations for 2019 headline inflation to 1.3 per cent from 1.5 per cent in the previous poll. Core inflation, an MAS indicator that strips out private transport and housing costs, is seen at 1.8 per cent in 2019 and 1.7 per cent for 2018, unchanged from the previous poll.

The Ministry of Trade and Industry (MTI) last month revised its forecast for GDP growth this year to 3.0 to 3.5 per cent, from 2.5 to 3.5 per cent previously. The economy is expected to grow by 1.5 to 3.5 per cent in 2019, according to MTI.

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