MAS poll: Small dip in S'pore growth

SINGAPORE - Economists and analysts are marginally less optimistic about Singapore's growth, according to the latest survey by the Monetary Authority of Singapore (MAS).

Singapore's gross domestic product (GDP) is expected to expand 3.8 per cent this year, according to the 22 private-sector experts who responded to the MAS poll last month.

This is a slight dip from the 3.9 per cent median forecast in the previous poll in December.

Economists attributed the trimmed expectations to how closely Singapore's economy is tied to what is happening globally, though some noted that the changes are "marginal".

CIMB regional economist Song Seng Wun noted that the "lifeblood" of Singapore's economy is global trade in goods and services and some factors could have affected the confidence of analysts.

"For example, the Arctic blast in the United States kept people at home. Shops and department stores had less traffic. In turn, factories in Asia were quieter," he said.

Even rising tensions over Ukraine would have an impact on the Republic's economy, as it has become a "geo-political issue", he added.

Mr Song also said that the manufacturing sector is expected to have a higher growth because some industries in the sector are seeing strong demand.

"One of them is the petro-chemical industry. ExxonMobil recently expanded its chemical plant on Jurong Island and things like these help the cluster grow."

Closer to home, China and Japan's economies may also affect economic growth here.

National University of Singapore economist Shandre Thangavelu said: "China and Japan are growing but there is also rebalancing going on and that can affect regional growth."

OCBC Bank economist Selena Ling, who took part in the poll, said likely reasons for the "downgrade" in the GDP growth forecast are "some increased caution for the services sectors due to the domestic labour crunch" and "lingering uncertainties" over the China market.

Meanwhile, inflation for this year is tipped to reach 2.8 per cent, the same as what was forecast in the December survey. Core inflation, which excludes housing and private road transport costs, is set to be 2.4 per cent, up slightly from the 2.3 per cent previously.

"Housing prices are stabilising and, perhaps, easing, and certificate of entitlement prices are also stable," said Mr Song.

"Core inflation may be higher because of certain policies and measures, such as the mandatory progressive wage model for those in the cleaning industry. Higher wages will, in turn, be passed on to consumers."

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