3/16/2016, 7:59 AM (Source: TeleTrader)
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Singapore: Forecast of GDP growth in 2016 cut to 1.9%

The economy of Singapore is forecast to expand by 1.9% in 2016, according to the latest survey by Monetary Authority of Singapore (MAS). The figure was revised from previous estimate of 2.2%. The expectations for the first quarter of 2016 are set at 1.6%, said the MAS in the report published on Wednesday.

The Ministry of Trade and Industry has estimated that the economy would grow in the range of 1-3%.

Analysts have shown more pessimism for city-state's manufacturing sector, which is expected to contract by 2.7%, while the financial and insurance sectors would grow by 3.6%. There is also a brighter outlook for wholesale and retail to grow by 3.9% in line with previous survey, while construction activity is seen adding 2.6% in 2016. Experts think that private consumption will grow by 3.2%, more than previously estimated rate of 2.8%, but domestic exports are seen edging up just 0.2% for the entire year.

The 24 analysts, who closely monitor the economy of the Lion City, have also cut expectations for the inflation in 2016. The Consumer Price Index-All Items is expected to roll down 0.2%, which compares with expectations of an increase of 0.5% in the December survey.

Core inflation, excluding accommodation and private road transport costs, is forecast at 0.8%, slightly lower than the previous survey's mark of 1.0%. The official forecast ranges from -1% to 0%, with core inflation estimated at 0.5-1.5%.

The economy of Singapore expanded by 1.8% in the fourth quarter of 2015, beating median forecast from economists and analysts, who had estimated a growth of 1.4%. The gross domestic products of the Republic of Singapore increased by 2.0% during 2015, slightly crossing the expectations of 1.9%.

The survey comes ahead of the government's plan to present the budget for 2016 on March 24, with expectations the better part of it would be channelled to help companies improve their revenues, thus adding more to the GDP growth.

The stock market was not impressed with the findings. The main Straits Times Index fell 0.08% to 2,837 points at 7:57 a.m. CET (1:57 p.m. SIN).

The Singapore dollar rose 0.29% against the Japanese yen, and lost 0.08% versus the U.S. dollar at 7:57 a.m. CET (1:57 p.m. SIN).

Breaking the News / ZR