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SINGAPORE: Economists have raised their forecasts for Singapore’s growth this year, anticipating firmer improvement in the manufacturing and finance sectors.
Singapore’s gross domestic product is expected to rise 5.8 percent this year, according to the median forecast of 24 economists surveyed by the Monetary Authority of Singapore (MAS).
They were expecting 2021 growth of 5.5 percent in the previous survey in December.
Economists’ outlook also improved for the labor market, pointing to a lower overall unemployment rate of 2.9 percent by year-end, according to the report released by MAS on Wednesday (March 10).
This is slightly lower than the 3 percent forecast in the previous survey.
READ: Singapore’s unemployment rate in November fell for the first time in 2020
Singapore’s economy has been hit hard by the COVID-19 pandemic. It hit its worst recession last year even with a nearly S $ 100 billion stimulus.
The contraction eased in the fourth quarter as more coronavirus-related restrictions were lifted, but expectations are for a slow and uneven recovery.
During the first quarter of this year, the economy is likely to remain reeling, economists from the MAS survey said. They registered a year-on-year contraction of 1.1% and the construction sector continued to be the most lagging behind.
READ: Singapore maintains GDP forecast for 2021 as the economy contracts 5.4% last year, less than anticipated estimates
As the year progresses, the construction sector is expected to recover, with economists forecasting growth of 22.5 percent by 2021. This compares with their previous estimates of nearly 29 percent.
Their outlook also dimmed slightly for wholesale and retail, which is expected to grow 4.5% instead of 5%, and for accommodation and private consumption, which is expected to grow 11% instead of 15%.
Similarly, private consumption is forecast to rise 7.9 percent, slightly below the 8.5 percent in the survey three months ago.
On the other hand, they expect the manufacturing sector to remain a bright spot for Singapore’s economy, with growth of 4.7 percent. This is an improvement over previous estimates of 4.5 percent growth.
Expectations also improved for the finance and insurance sector by 5.8 percent, compared with 5.1 percent in the previous survey.
National non-oil exports are forecast to grow 6.9 percent this year, also higher than the latest estimate of 4 percent.
READ: IN FOCUS: After COVID-19, where is Singapore’s workforce and economy headed?
Economists said an escalation in the COVID-19 situation remained the main downside risk to growth, followed by geopolitical tensions and an earlier-than-expected pullback in support for global macroeconomic policy.
On the upside risks, they include containment of the pandemic due to faster global vaccine deployment, stronger-than-expected performance from the manufacturing sector, the possibility of borders reopening for travel. international and better global growth.
Later in 2022, economists expect Singapore’s economy to grow 3.8 percent.
The MAS survey was sent out on February 15 to private sector economists. The findings do not reflect the views or forecasts of the central bank, he said.
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