Economists See 5.5% Growth For Singapore In 2010: MAS

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Singapore's economy is expected to grow faster than initially estimated in 2010, a quarterly survey of private economists by the Monetary Authority of Singapore showed Wednesday.

Economists now forecast an economic growth of 5.5% in 2010 after an estimated 2% contraction this year. That compares with a September forecast for a 4.5% growth in 2010 and a 3.6% contraction in 2009.

The current outlook is better than the government's prediction for a 3% to 5% growth in 2010. The MAS said these forecasts reflect views of 20 respondents and do not represent the central bank's view.

"As reflected by the mean probability distribution, the most likely outcome is for the Singapore economy to expand by 5.0% to 5.9% next year," the MAS said in a report.

Survey respondents expect the gross domestic product to rise 4.7% in the final quarter of 2009, faster than the 1.9% growth forecast in September. The city-state economy expanded by 0.6% in the third quarter, better than the median forecast for a 3% contraction as reported in the previous survey.

Economists expect economic growth to accelerate to 9.6% in the first quarter of next year before easing to 6% in the second quarter. Growth is then anticipated to slow to 3.7% in the third quarter and rise to 5% in the final quarter of 2010.

All sectors of the economy are expected to expand next year in line with improvements in global economic conditions. Singapore's manufacturing sector is likely to grow by 6.3%, financial services by 6.5%, construction by 7.1%, wholesale and retail trade by 7% and hotels and restaurants by 5.2%. Private consumption is expected to rise 3.8% and non-oil domestic exports by 10.1%.

Further, the forecast for consumer price inflation in 2009 rose to 0.3% from 0.0% reported in the previous survey. The outlook for the fourth quarter is at 0.0%. Next year, inflation may rise to 2.8%, the survey found. That compares to the central bank's prediction of 0.0% this year and between 2.5% to 3.5% next year.

The respondents now expect the unemployment rate to be at 3.4% by year-end, lower than the 3.8% reported in the previous survey. The rate is forecast to drop further to 3% by end-2010.

Singapore's economy is expected to grow faster than initially estimated in the next year, a quarterly survey of private economists by the Monetary Authority of Singapore showed Wednesday. (Market News Provided by RTTNews)