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SINGAPORE: Private sector economists surveyed by the Monetary Authority of Singapore (MAS) expect the economy to contract 6 percent this year, unchanged from the previous survey released three months ago.
The economy is likely to contract 4.5 percent year-on-year in the last three months of the year, following a smaller-than-expected drop of 5.8 percent in the third quarter, according to the latest quarterly central bank survey released on Wednesday (December 9).
For the expected recovery in 2021, economists are sticking to their previous estimate of 5.5 percent growth. This is within the government’s forecast range of 4 to 6 percent growth next year.
READ: Singapore Revisits Growth Outlook As Third Quarter GDP Shrinks 5.8% Slower Amid COVID-19
Sent on November 23, the MAS survey received 23 responses from private sector observers of the local economy. The survey results do not reflect the central bank’s views or forecasts, he said.
Across all key macroeconomic indicators, manufacturing had the largest improvement in terms of the full-year outlook. Economists now expect the sector to expand 5.8% in 2020, up from 2.3% in the last survey.
Minor contractions were also forecast for wholesale and retail trade, as well as for accommodation and food services.
But forecasts for other indicators were more pessimistic, with construction down sharply. The sector is now seen declining 36.2 percent for the full year, compared to 23 percent in the previous survey.
Other forecasts that were slightly worse include private consumption, which is expected to contract 13.4 percent compared to the previous average forecast of a drop of 11.8 percent.
READ: COVID-19 slowdown will be longer than past recessions, slow job market recovery: MORE
Growth expectations were also slightly lowered for finance and insurance, as well as for non-oil domestic exports.
There was a slight rebound in terms of unemployment, with an average forecast of 3.7% compared to 3.5% previously.
Further deterioration in the current COVID-19 outbreak continued to top respondents’ list of downside risks to the economy, followed by concerns about insufficient stimulus globally and an escalation in trade tensions between the United States and China.
In contrast, effective containment of the pandemic through widespread global deployment of a vaccine was the main bullish driver. Others include the reopening of borders to international travel, stronger-than-expected performance in manufacturing, and a fiscal stimulus to support Singapore’s recovery.
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