Friday, September 7, 2007

Taking a cue from the government, private-sector economists have bumped up their forecasts of Singapore’s 2007 economic growth to a median of 7.5 per

Taking a cue from the government, private-sector economists have bumped up their forecasts of Singapore’s 2007 economic growth to a median of 7.5 per cent, with the most optimistic gunning for 8.1 per cent.

The 7.5 per cent forecast from 18 respondents to the Monetary Authority of Singapore’s quarterly survey of professional forecasters last month is 1.5 percentage points higher than the May poll’s results - and smack in the middle of the latest revised 7-8 per cent official growth forecast.

The 2007 growth forecasts from the latest MAS poll - which range from 6.7 to 8.1 per cent - are heavily skewed towards the high end.

The survey respondents put a near-50 per cent chance on the economy growing 7 to 7.9 per cent this year and a 23 per cent probability that growth will be in the 8 to 8.9 per cent range.

The economy grew 7.6 per cent in the first six months of 2007, and the forecasters expect the pace to continue in the second half.

The economists see third-quarter growth at a median 7.8 per cent, and fourth quarter at 7.6 per cent. Growth this year is expected to be driven by two resurgent sectors in particular - financial services and construction.

The forecasters see financial services growing a median 12.2 per cent in Q3 and 13.5 per cent year-round.

For construction, the estimates are a median 15 per cent growth, for both Q3 and year-round. The sector grew 17.6 in Q2, when overall GDP expanded a blistering 8.6 per cent.

Among other key indicators, the economists forecast inflation to come in at 1.5 per cent this year and the jobless rate to edge down to 2.5 per cent by year-end.

Next year, GDP growth is projected to moderate to 6.5 per cent. This too has been raised from an earlier estimate of 5.8 per cent in the previous survey. The economists reckoned that the Singapore economy will most likely grow between 6 and 6.9 per cent.

Source : Business Times - 06 Sept 2007

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