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Trade Protectionism the Biggest Threat to Singapore’s Economy: MAS survey

SINGAPORE (Dec 12): Trade protectionism is cited as the top risk among local economists, as suggested by the latest findings of the Monetary Authority of Singapore’s (MAS) Dec 2018 survey of professional forecasters, which reflect the views of 23 economists and analysts who closely monitor the Singapore economy.

Based on the latest survey’s findings, 100% of respondents cited an intensification of US-China trade tensions as a downside risk – up from 89% in the previous survey for Sept 2018.

In a Wednesday report, MAS also notes that a growing number of respondents flagged slower growth in China as a downside risk, on the back of tightening credit conditions. Faster-than-expected US interest rate hikes also remains a key concern as they could trigger financial market turbulence.

Following the Singapore economy’s 3Q expansion of 2.2%, which comes in marginally higher than the median forecast of 2.1% reported in the Sept survey, y-o-y growth in 4Q18 is now expected to come in at 2.4%.

Respondents are expecting GDP growth for the full year of 2018 to come in at 3.3%, which is up slightly from 3.2% in the previous survey.

Based on the mean probability distribution, MAS says the most likely outcome is for Singapore’s economy to grow by between 3-3.4% in 2018, which is unchanged from the previous survey.

Respondents overall assigned a 65.6% probability this range, significantly up from 39.2% in the Sept survey, alongside a decrease in the average probabilities assigned to all other ranges.

Looking ahead, respondents are expecting GDP growth to ease to 2.6% in 2019 as a whole, which is slightly lower than the 2.7% growth projection in the previous survey.

On average, the growth outcome for Singapore’s economy is most likely to fall within the range of 2.5%-2.9% next year, unchanged from the previous survey, says MAS.

The forecast for MAS core inflation in 2018, as well as expectations of the unemployment rate to be at 2.1% by the end of the year, remain unchanged at 1.7% and 2.1%, respectively.



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