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SINGAPORE – Singapore’s economy will grow 5.5% in 2021 to end the worst recession in the country’s history, induced by the coronavirus pandemic, according to a central bank survey of professional forecasters.
The growth rate may be even higher if the pandemic is contained through a successful deployment of vaccines around the world, they said.
The prediction made by 23 economists and analysts in the Monetary Authority of Singapore (MAS) quarterly survey was unchanged from the previous forecast made in September.
However, its forecast range for 2021 growth was lowered from 5% to 5.9% from 4% to 5.9%, the MAS survey report released on Wednesday (December 9) showed.
The private forecast comes after the Ministry of Commerce and Industry (MTI) forecast in November that growth will rebound between 4% and 6% in 2021, the most since at least 2011, when the economy expanded a 6.3%.
For 2020, private forecasters expect gross domestic product (GDP) to decline by 6 percent, also unchanged from the previous survey. That compares with the MTI’s forecast of a contraction of 6.5% to 6% in 2020.
Economists also expect GDP to contract 4.5 percent year-on-year in the fourth quarter of this year, after contracting 5.8 percent in the September-October period, less than their forecast for a drop. of 7.6 percent in the previous period. poll.
For the labor market, they expect the unemployment rate to reach 3.7 percent by the end of 2020, up from their estimate of 3.5 percent in the previous survey.
Inflation measured by the consumer price index and MAS core inflation in the fourth quarter of this year is expected to be minus 0.3 percent and minus 0.2 percent respectively.
Three-quarters of those surveyed in the MAS survey expect private residential property prices to recover in the October-December period compared to the previous quarter, while the rest believe they will remain stable.
Looking ahead, containment of the pandemic, mainly attributable to the widespread global deployment of a vaccine, re-emerged as the most cited upside risk to Singapore’s growth prospects, with 77.8% ranking it as the top risk. upward.
The prospect of reopening the borders to international travel was seen as a potential upside by 44.4 percent of respondents who also identified stronger-than-expected manufacturing sector performance led by the production of electronics and pharmaceuticals, as well as a fiscal stimulus, in support of Singapore’s recovery. .
On the downside, a further deterioration in the Covid-19 situation, due to further outbreaks or delays in vaccine development, once again topped the list of downside risks to Singapore’s growth prospects in the survey.
The threat was identified by 88.9 percent of those surveyed and 72.2 percent of them ranked it as the most important downside risk.
Economists were also concerned about the risks of an earlier-than-expected pullback in support for global macroeconomic policy, resulting in a premature tightening of global financial conditions and weaker demand due to fiscal consolidation.
This risk was identified by 44.4 percent of those surveyed, up from 20 percent in the previous survey.
27.8% identified an escalation in tensions between the United States and China as a downside risk, compared with 60% in the previous survey.
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