Singapore cuts growth forecast for 2016
SINGAPORE’S gross domestic product now is expected to grow by 1-1.5 per cent this year, down slightly from an earlier forecast of 1-2 per cent.
Growth next year is tipped to come in between 1 and 3 per cent on the back of a slightly stronger global outlook, the Ministry of Trade and Industry (MTI) said yesterday.
It made these forecasts in the latest Economic Survey of Singapore, which showed that GDP expanded 1.1 per cent in the third quarter from the corresponding period a year ago – an upward revision from earlier estimates of 0.6-per-cent growth.
Compared with the preceding three months, the economy shrank 2 per cent in the July-to-September quarter.
Statistics released by trade agency International Enterprise (IE) Singapore showed that non-oil domestic exports (Nodx) decreased by 5.4 per cent year on year, while non-oil re-exports (Norx) increased by 2.5 per cent. Nodx is expected to shrink by 5-5.5 per cent this year on the back of lacklustre global growth – a larger contraction than the shrinkage of 3-4 per cent previously forecast.
Nodx is expected to pick up next year in line with a stronger global economy, said IE Singapore, which has forecast a range of negative-1 per cent to positive-1 per cent for 2017.
Total merchandise trade declined by 5.0 per cent in the third quarter, following the 5.7-per-cent contraction in the previous quarter, it said, while total services trade increased by 0.1 per cent to reach 97.7 billion Singapore dollars, following the 2.3-per-cent rise in the preceding quarter.
The outlook for 2017 is mixed, MTI said. Economies such as the United States, Japan and Asean are expected to pick up pace next year, even as growth in the euro zone and China slow.
However, while global growth is on track to improve on the whole, this might have limited impact on Singapore’s exports because companies in the US and China are investing less, and increasingly sourcing for inputs domestically instead of relying on imports.
There are also significant risks, including a mounting backlash around the world against globalisation. This could further weigh on already-weak world trade and dampen confidence, the ministry noted.
