Economists have slashed the Singapore’s 2014 GDP growth forecast to 3.3 percent from a median projection of 3.8 percent in June, according to a survey by the Monetary Authority of Singapore (MAS) as reported in the media.
This puts their latest forecasts within the government’s projected range of 2.5 to 3.5 percent.
“I think the downgrades shouldn’t come as a surprise, because a weaker Q2 basically brought down the full-year forecast,” said Chua Hak Bin, an economist at Bank of America Merrill Lynch.
The lower forecast is attributed to a disappointing second quarter and weaker growth expectations for Singapore’s economy, except for the finance and insurance sector, where projections have remained the same at 5.5 percent.
Despite the lower median forecast of 3.3 percent, economists are not ruling out further downgrades.
“Some analysts are still hanging on to a thread of hope that we’ll see some acceleration in the second half, but this thread is just getting weaker” as there are still many downside risks, externally and domestically, added DBS economist Irvin Seah.
Locally, economists are worried about the tight labour market and the rising business costs. Externally they are concerned over the Eurozone’s stagnant economy, China’s uncertain manufacturing outlook and Japan’s lacklustre consumption and investment figures.
Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
