Singapore economy in recovery mode: 4% growth tipped for 2018

November 9, 2017

SINGAPORE - Growth prospects are brighter for the Singapore economy, according to a research report from ANZ Bank, which says that after two years of sub-par performance, GDP growth is forecast to reach 3% in 2017.

“The conditions for a further acceleration in growth over 2018 appear to be falling in place. We thus upgrade our 2018 GDP growth forecast to 4%,” the bank says.

“The broadening in global growth has already benefited Singapore’s externally-oriented sectors, and this is expected to carry over into next year.

“While there could be some moderation in the global IT cycle, a long-awaited pick-up in business investment in the G3 economies will sustain Singapore’s export momentum.”

ANZ points out that domestic demand has not shown much improvement so far this year. Weakness in both the property and labour markets has weighed on household consumption, and i Investment contracted at its fastest pace since 2003, which offset some of the recovery in exports.

“However, the sharp rise in en-bloc sale transactions since mid-2017 suggests residential constructive activity will start to pick up next year and add to growth, after subtracting from it since 2014,” ANZ says.

“Residential property prices, which posted their first quarterly increase in Q3 in almost four years, are set to continue rising, helping to lift household consumption. We expect the export recovery to also start feeding through into business investment. (ATI).