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The analysts expect the central bank’s core inflation measure to come in at 0.9%, a bit lower than the 1.0% predicted in September.
The analysts expect the central bank’s core inflation measure to come in at 0.9%, a bit lower than the 1.0% predicted in September.

Economists Turn Bearish on Singapore’s Growth Outlook

Singapore’s small, open economy has been buffeted by declines in global trade as well as its exposure to sharp drops in commodity prices

Economists Turn Bearish on Singapore’s Growth Outlook

Economists polled by Singapore’s central bank predict the economy will grow at a slower pace than previously expected, as the export-reliant nation grapples with falling global trade.
According to the Monetary Authority of Singapore, polled economists’ median forecast was for Singapore’s GDP to grow 1.4% this year, compared with a previous expectation for 1.8% growth, MarketWatch reported.
The December survey of professional forecasters, sent out in late November by MAS, found economists turned more bearish since the previous survey.
Singapore’s main nonoil domestic exports are expected to fall 4.4% in 2016, according to the median estimate in the poll of external economists by the MAS. That was worse than a 3.6% contraction in exports of goods made in Singapore predicted in a similar survey in September and a 2.1% fall predicted in June.
A total of 22 economists and analysts who monitor Singapore’s economy responded to the central bank’s survey. They don’t represent the views or forecasts of the central bank, the MAS said in a statement on Wednesday.
The survey predicted gross domestic product would rise 1.5% in 2017, down from the 1.8% GDP growth predicted in a survey three months ago and a 2.1% gain expected in a June survey.

  Buffeted by Declines
Singapore’s small, open economy has been buffeted by declines in global trade as well as its exposure to sharp drops in commodity prices. Redundancies in the first nine months of the year hit their highest since the first nine months of 2009, during the global financial crisis, government data earlier this week showed.
The forecasters expected the headline consumer price index would rise 1.0% next year.
A slump in regional trade and slower demand from China—the biggest customer for the exports of several countries—have hurt many Asian economies. Singapore’s externally-oriented economy has been among the hardest hit by the trade slump, made worse by weak oil prices, which have hurt the nation’s offshore and marine industry.
The survey predicts that on average, Singapore’s monthly consumer-price index would fall 0.5% this year, the same as predicted in the September survey.
The analysts expect the central bank’s core inflation measure to come in at 0.9%, a bit lower than the 1.0% predicted in September. The core inflation measure strips out the costs of private road transportation and accommodation, two items that don’t form a part of the typical Singaporean household’s monthly budget.

  Growth Cut
In the survey, the forecasters also cut their outlook for this year’s growth to 1.4% from 1.8% in the September survey. That followed third-quarter growth coming in weaker than expected at 1.1% on-year, below the September survey’s forecast of 1.7%, CNBC reported.
The forecasts for 2016 growth ranged from 1.1% to 1.6%.
The economists now expected the finance and insurance sector would grow just 0.5% in 2016, down from 2% in the previous survey. They also cut the wholesale and retail trade growth forecast to 0.1% for 2016, down from the September survey’s 2.1% growth forecast.
The private consumption growth forecast was cut to 1.4% for this year, down from 3% in the September survey.
The headline consumer price index was expected to fall 0.5% for the full year, with the forecast unchanged from September.
For the fourth quarter of 2016, economists expected just 0.6% on-year growth on average, with a median forecast of 0.8%. The forecasts ranged from a 0.6% contraction to 1.4% growth.
Meanwhile, the survey also found the Singapore dollar was expected to weaken further against the greenback, with the average forecast expecting the US dollar to be fetching around 1.465 Singapore dollars at the end of 2017. The forecasts ranged from 1.37 to 1.55 Singapore dollars.

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