Forecasts of Singapore’s 2010 growth have just reached a new high of 12.5 percent.
A month after a half-point upgrade to 9.5 percent, Kit Wei, an economist at Citigroup, has added three full points to his full year gross domestic product (GDP) forecast on the back of “better historical data”.
Mr. Kit’s 12.5 percent forecast assumes over 16 percent growth in Q2, supported by a surge on biomedical manufacturing and electronics, and following a 15.5 percent rate in Q1. This will be followed by a pull-back in sequential momentum during the second half.
The slowdown would partially be a technical pull-back but it also manifests risks from the European crisis, said Mr. Kit. “If instead, we see flat sequential growth in the second half, full-year GDP growth could rise to 14-15 per cent.”
While the country’s GDP forecasts have gone up in the past six months, economic sentiment elsewhere, particularly in key economies, appears to have weakened, though recovery prospects are still intact.
A poll of fund managers conducted by Bank of America Merrill Lynch Research early this June reported a significant drop in confidence on the global economic growth and on the ability of companies to boost profits.
The newest monthly survey shows that only 24 percent of respondents believed that the world economy will improve in the coming 12 months, down from 61 percent in April and 42 percent in May. The same concerns were also expressed over corporate profits.
The fears and doubts were not only about Europe. Confidence in China has apparently hit its lowest point since January last year, with 27 percent of fund managers expecting the Chinese economy to weaken in the next 12 months, a steep turnaround from April when 21 percent expected an improving economy.