Singapore’s gross domestic product (GDP) is estimated to expand by 4.0% in 2022, according to market watchers in the Monetary Authority of Singapore’s (MAS) survey of professional forecasters.
The survey, which was released on March 9, polled a total of 26 economists and analysts, who sent in their responses after the hostilities in Ukraine on Feb 24.
According to the survey, the Singapore economy is most likely to grow by 3.0% to 4.9% in 2022, encompassing two ranges with a combined probability of 66.5%.
On a sectoral basis, the growth in Singapore’s GDP in 2022 is likely to be led by accommodation & food services, construction, as well as non-oil domestic exports with estimated expansions of 9.1%, 9.0% and 7.8% respectively.
Conversely, the manufacturing, finance & insurance, and private consumption sectors are likely to register moderate growth at 4.1%, 4.1% and 4.5% respectively.
In the survey, market watchers have also estimated CPI-All Items inflation and MAS Core Inflation to come in at 4.0% and 2.5% respectively in the 1Q2022.
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The median CPI-All Items inflation for 2022 is forecast to be 3.6%, up from 2.1% in the December survey. During the year, CPI-All Items inflation is likely to fall in the range of between 3.5% to 3.9%, up from the 2.0% to 2.4% range pegged in the previous survey.
Meanwhile, the median forecast for MAS Core Inflation has risen to 2.7% from 1.8% previously. In 2022, the range for MAS Core Inflation is expected to come in between 2.5% to 3.4%, up from the previous survey’s range of 1.5% to 1.9%.
As for the labour market, the respondents expect the unemployment rate to reach 2.2% at year-end, unchanged from the previous survey.
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In 2023, economists have forecast a GDP growth of 3.0% with a range of between 3.0% to 3.9% with an average possibility of 33.5%.
CPI-All Items inflation is forecast at 2.4% in 2023, while MAS Core Inflation is expected to come in at 2.4%.
Of the economists and analysts surveyed, 94.5% of respondents feel Singapore's economy is likely to face downside risks from a sharper-than-expected rise in inflation driven mainly by higher energy and food prices. This comes with an associated increase in the pace of monetary policy tightening by major central banks.
Respondents were also concerned about the downside risks arising from the geopolitical tensions from the Russia-Ukraine conflict.
Risks from a further deterioration in the Covid-19 situation, and an associated re-tightening in public health measures were also cited.
At the same time, the prospect of the re-opening of borders to international travel emerged as the most frequently cited upside risk to Singapore’s growth outlook.
Other upside risks include a stronger-than-expected expansion in manufacturing output, as well as from more robust growth in China, driven for instance by macroeconomic policy easing.
Photo: Bloomberg
