Economists slash S’pore’s ’19 growth forecast to 0.6pc

6 September, 2019 12:00 AM printer

Singapore: Private-sector economists have sharply lowered their full-year growth forecast for Singapore to 0.6 per cent, down from their 2.1 per cent prediction in June, in the Monetary Authority of Singapore's (MAS) latest quarterly survey of professional forecasters released on Wednesday.

The downgrade "is hardly surprising given the escalation of the US-China trade conflict since the last survey", combined with much weaker than expected Q2 numbers, said Maybank Kim Eng economist Lee Ju Ye, report agencies.

The lowered expectation is in line with the government's forecast range of zero to 1 per cent, reduced in August from 1.5 to 2.5 per cent previously.

Sent out in August, the survey received responses from 23 economists and analysts. It does not represent MAS's views or forecasts.

For the third quarter, the economists expect year-on-year growth to be 0.3 per cent, better than the second quarter's flat 0.1 per cent print.

Assuming third quarter year-on-year growth stays positive, a negative quarter-on-quarter seasonally-adjusted rate is unlikely, "thus avoiding a technical recession episode", said UOB economist Barnabas Gan.

Maybank's Ms Lee and senior economist Chua Hak Bin believe Singapore "may have narrowly dodged a technical recession in the third quarter", as the manufacturing downturn eases on front-loading of trade orders in anticipation of higher US tariffs, and services performance is bolstered by hospitality and finance.

The survey found that the most likely range for full-year growth is 0.5 to 0.9 per cent, with a 37.3 per cent chance. Coming second is the range of zero to 0.4 per cent, with a probability of around 30 per cent.

Compared to the June survey, growth predictions worsened for almost all sectors: manufacturing (-2.4 per cent, worse than -0.2 per cent previously), construction (2.7 per cent, down from 3.5 per cent), wholesale and retail trade (-2.8 per cent, down from -0.3 per cent), and accommodation and food services (0.8 per cent, down from 1.4 per cent).