S'pore Economy Tipped To Grow 6.3% In 2008: MAS Poll

Source : The Straits Times, Dec 7, 2007

DESPITE the financial gloom in the United States, market economists here expect the Singapore economy to grow at a respectable 6.3 per cent on average next year, according to the latest Monetary Authority of Singapore (MAS) poll.

Although the 18 economists cut their 2008 growth forecasts from a median 6.5 per cent in the previous poll in September, the revised growth estimate for next year is still near the top end of the Singapore government's 4.5-6.5 per cent forecast range.

Growth for the whole of this year, however, will likely come in higher than the market had expected three months ago.

Last year, Singapore's economy grew by 7.9 per cent.

The median consensus among market economists is for the economy to expand by 8 per cent this year, up from the 7.5 per cent forecast in September.

This follows stronger-than-expected third quarter growth of 8.9 per cent.

However, the market expects inflation next year to remain at the same level as October, when consumer prices rose by their fastest pace in 16 years.

The economists and analysts polled by MAS expect inflation in 2008 to average 3.6 per cent, with forecasts ranging from 2.5 per cent to 4.2 per cent. In September, they projected inflation in 2007 to be 1.5 per cent.

The Singdollar is predicted to end 2008 at $1.40 to the US dollar, says the median consensus.

Expectations for a slowing Singapore economy come after the OECD said on Thursday that growth in China and India would not be as furious as before.

The OECD said financial market troubles were the biggest risk, but simply unquantifiable right now.

'Respondents expect broad-based GDP growth across the manufacturing and services sectors to continue in 2008,' said the MAS poll.

Economists expect the construction and financial services sectors to continue to lead growth next year, expanding by 13.5 per cent and 9.0 per cent respectively.

The manufacturing sector, which accounts for about a quarter of the economy, is seen growing 6.8 per cent next year.

Its major export markets are Europe and the United States.

The OECD said economic growth in the industrialised world is losing steam after a strong run, and the US economy is slowing sharply but not sliding into recession.

'The risk factors are externally driven and economic

fundamentals remain strong,' Reuters quoted DBS economist Irvin Seah as saying.