Economists cut Singapore's growth forecast in MAS survey

 Private-sector economists have lowered their forecasts in the Republic's growth and inflation outlook this year. In the latest quarterly survey conducted by the Monetary Authority of Singapore (MAS), the economists expect the economy to grow by 2.8 per cent this year, down from the previous forecast of 3.1 per cent.

The estimates are based on median figures found in MAS' quarterly Survey of Professional Forecasters, which was released on Wednesday (Mar 18). When reflected by the mean probability distribution, the most likely outcome is for the Singapore economy to grow by between 2 and 2.9 per cent this year, the central bank said.

GDP growth in Q4 2014 was weaker than expected, said MAS in the report. The economy expanded by 2.1 per cent in the quarter, lower than the median forecast of 2.3 per cent reported in the last survey. For 2014 as a whole, the economy expanded by 2.9 per cent, slightly below the 3 per cent estimate.

The GDP growth prediction for Q1 2015 has been downgraded to 2 per cent, from the earlier 2.5 per cent forecast, it added.

INFLATION OUTLOOK ALSO LOWERED

The median CPI inflation forecast for 2015 fell to 0.1 per cent in the latest survey, down from the 1.1 per cent reported in the December 2014 survey, reported MAS. Survey respondents also expect MAS Core Inflation to be 1 per cent, below the 1.9 per cent projected in the previous survey. For Q1 2015, CPI All-Items inflation is expected to come in at -0.2 per cent.

Economists also estimated the unemployment rate to be 2 per cent by year-end.

According to the survey, Singapore's GDP is expected to grow by 3.1 per cent in 2016, while CPI All-Items and MAS Core inflation are projected to come in at 1.3 per cent and 1.9 per cent, respectively. When reflected by the mean probability distribution, the most likely outcome is for the Singapore economy to grow by between 2 and 2.9 per cent next year.

The results are based on a survey of 21 economists and analysts who closely monitor the Singapore economy, and does not represent MAS' views or forecasts, it said.