Economists Raise Singapore's 2024 Growth Forecast in MAS Survey

By Amanda Lee

SINGAPORE--Experts surveyed by Singapore's central bank have raised their 2024 growth forecast on expectations of faster growth for some industries, including the financial and construction sectors.

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

The survey's respondents forecast wholesale and retail trade to expand 3.0% this year, up from 2.5% in the June survey, and they predicted construction to grow 3.9%, compared with 3.8% predicted previously. They expect finance and insurance to rise 5.7% this year, up from the 5.1% expansion projected before, and for non-oil domestic exports to grow 3.0% this year, down from the 4.0% expansion predicted in the June survey.

The MAS survey's respondents predict that Singapore's GDP to expand by 2.5% in 2025, unchanged from the previous survey.

A slowdown in external growth and spillovers from geopolitical tensions, including higher U.S. tariffs and weaker growth in China, emerged as the most-cited downside risks factors for the Singapore economy, the survey showed.

On the other hand, better-than-expected external growth was the most frequently cited upside risk to Singapore's outlook, with more robust growth in China and a faster-than-expected tech cycle recovery as other key upside risks.

Inflation is expected to ease this year, with headline inflation expected at 2.6%, down from 2.8% projected previously, while core inflation is forecast at 2.9%, down from 3.0% previously.

The majority of the respondents said they don't expect changes to 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, expect a reduction in the slope of the S$NEER policy band, the survey indicated.

The central bank's monetary policy is centered on Singapore's exchange rate, which it considers an effective tool for maintaining price stability in the small and open economy.

The MAS said the September survey was sent out to 25 economists and analysts, of which 21 responded. It said the results of the survey don't represent the central bank's own views or forecasts.

Write to Amanda Lee at amanda.lee@wsj.com

(END) Dow Jones Newswires

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

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