14-6-2023 (SINGAPORE) Private sector economists have lowered their forecast for Singapore’s economic growth in 2023 to 1.4%, compared to their previous projection of 1.9% in March, according to the latest survey conducted by the Monetary Authority of Singapore (MAS). Released on June 14, the survey revealed that 61% of the 24 respondents identified spillover effects from an external growth slowdown as the most significant downside risk to the domestic outlook. They also highlighted inflationary pressures and escalating geopolitical tensions as potential risks to Singapore’s growth outlook.
The ban imposed by China in May on US semiconductor giant Micron from selling chips to its domestic industries further escalated tensions between the two countries. Economists in the previous month warned that Singapore had a “high risk” of entering a technical recession in the second quarter of this year. However, in MAS’ latest survey, 71% of the respondents cited the more robust growth in China as the biggest upside risk to Singapore’s growth outlook, driven by economic reopening and macroeconomic policy easing.
Earlier in the year, China reopened its borders and lifted quarantine requirements for incoming travelers. Singapore’s Ministry of Trade and Industry (MTI) maintained its growth forecast for 2023 at 0.5% to 2.5%, anticipating growth to fall around the midpoint of this range. Respondents in MAS’ survey expect gross domestic product (GDP) to expand by 2.5% in 2024.
The private-sector economists anticipate that core inflation will remain at 4.1% in 2023, the same projection as in March. The survey respondents expect core inflation, which excludes accommodation and private transport costs, to reach 4.6% in the second quarter of this year. Economists also anticipate a decline in core inflation to 3% next year.
