[ad_1]
SINGAPORE: Private sector economists expect Singapore’s economy to contract 6 percent this year, a slight downgrade from their previous forecast of a 5.8 percent drop after a worse-than-expected decline in the second quarter.
This was according to the latest quarterly survey by the Monetary Authority of Singapore (MAS) released on Monday (September 7), which surveyed 26 economists and analysts.
Observers of the local economy had previously forecast a 11.8% year-on-year decline in the April-June quarter, but the official quarterly gross domestic product (GDP) showed a 13.2% drop amid moderate external demand. and an internal circuit breaker ”Period that saw widespread business closures.
Second-quarter GDP marked Singapore’s worst quarterly performance, but that could be the lowest point for the economy, as MAS respondents expect a smaller contraction of 7.6 percent in the third quarter, the survey showed. .
READ: Singapore lowers GDP forecast range for 2020 as economy registers record quarterly decline in second quarter
Across all key macroeconomic indicators, the outlook for the year was mixed.
Expectations improved for industries such as manufacturing, with an average growth forecast of 2.3%, a slight rebound from 2.2% in the last survey, and for finance and insurance, with a growth forecast of 4 , 9% compared to 3.1% previously. percent.
Wholesale and retail trade is expected to contract 6.4 percent, halving a previous drop of 12.8 percent, while respondents forecast domestic non-oil exports to grow 4.5 percent this year. year, as opposed to the flat growth forecast previously.
But forecasts for other indicators were more pessimistic, particularly for the construction sector, which was hit hard, where a 23 percent contraction is now expected, much worse than the 11.4 percent drop previously forecast.
Food and lodging services are expected to experience a 29.1 percent annual contraction, worsening from the 26 percent decline forecast in the previous survey. Private consumption is forecast to fall 11.8 percent this year, below the latest forecast for a 5.2 percent decline.
Regarding the labor market, respondents expect the unemployment rate to be 3.5 percent by year-end, slightly below the 3.6 percent in the previous survey.
Further deterioration in the current COVID-19 outbreak continued to top respondents’ list of downside risks to the economy, followed by an escalation in trade tensions between the United States and China and a slower-than-expected global economic recovery. .
Rather, the main bullish risk was the containment of COVID-19 due to reasons such as the successful global rollout of a vaccine. Other potential benefits include stronger-than-expected manufacturing performance, led by the production of electronics and pharmaceuticals, and a decrease in global trade tensions.
Looking ahead to 2021, economists expect a recovery given the way they have charted growth of 5.5%. This is a more optimistic forecast compared to the 4.8 percent growth in the previous survey.
CHECK THIS: Our comprehensive coverage of the coronavirus outbreak and its developments
Download our app or subscribe to our Telegram channel for the latest updates on the coronavirus outbreak: https://cna.asia/telegram
