Economists expect that Singapore will have a stronger nine percent growth in 2010, anticipating larger increases in wholesale and retail, exports and manufacturing compared to their previous forecast.
The average gross domestic product (GDP) growth estimate from the most recent survey of the Monetary Authority of Singapore (MAS) for 19 professional forecasters reaches the upper limit of the government’s forecast range of seven to nine percent growth, surpassing the previous 6.5 percent median forecast in April.
MAS conducted the survey in late-May, following a stir of forecast upgrades after the country’s Q1 GDP increased 15.1 percent, well above the median growth forecast of 9.5 percent in March.
Risks from the sovereign debt crisis in Europe have resulted in worldwide market turmoil and uncertainty. However, David Cohen from Action Economics suggested that latest data releases in the area – manufacturing numbers in Singapore, exports value in Taiwan and job growth in South Korea – have all indicated positive growth.
Alvin Liew, economist at Standard Chartered, said: “We want to reflect a more cautious outlook, given the situation in Europe and the possibility of tightening measures in China.”
If the European condition hits trade and demand flows, it “will definitely show up in Singapore’s numbers,” said Mr. Liew, but the question is when this may happen.
Wai Ho Leong, economist at Barclays Capital, expected the impact of the slowed export demand and growth in Europe to flow in slowly. “The impact will not be immediate but come in ripple after ripple over the next few years as European governments tighten their budgets,” said Mr. Leong, who predicts an 8.5 percent growth this year.
Irvin Seah, economist at DBS, said: “Even with weakness in demand from Europe factored in, we still expect a strong full-year number.” Mr. Seah raised his estimate to 10.3 percent since the survey was carried out by MAS, on the back of the robust industrial production in April, which he believes could give double-digit growth in the second quarter.