The Singapore Economy Drops Expansion Prediction to 3.3% this Year

The figure predicted for Singapore’s economy has dropped from 3.8% to 3.3% in the recent survey, after figures showed that the GDP growth expected for the second quarter had not achieved its target. The news has left many economists in the private sector with confidence issues relating to the outlook for Singapore’s economy this year. According to a quarterly survey, the growth expectations have had to be altered significantly for all aspects of the economy.

The figure predicted for Singapore’s economy has dropped from 3.8% to 3.3% in the recent survey, after figures showed that the GDP growth expected for the second quarter had not achieved its target. The news has left many economists in the private sector with confidence issues relating to the outlook for Singapore’s economy this year. According to a quarterly survey, the growth expectations have had to be altered significantly for all aspects of the economy.

The recent survey suggests that, on a whole, the Singapore economy should grow by around 3.3% this year, which is a drop of 0.5% since the survey was released only three months ago. The GDP for the second quarter grew by only 2.4%, much lower than the 3.3% that was suggested in the June survey. As a result, the latest figures estimate official growth to be between 2.5 and 3.5 percent for this year, narrowing the range from 2 to 4 percent.

The Current Figures

The GDP current survey for Singapore has provided the following results:

* Manufacturing will drop from 5.6% increase to 4.2%

* Construction will drop from 5.6% increase to 4.7%

* Finance and insurance will remain at 5.5% increase

* Retail and wholesale trade will drop from 4.9% increase to 2.6%

* Food services and accommodation will drop from 2.1% increase to 1.5%

* Non-oil domestic exports will drop from 4.1% increase to -1.1%

* Private consumption will drop from 2.7% to 2.0%

Economists also expect inflation to slow over the remainder of the year. Experts have suggested that the CPI (consumer price index) will amount to approximately 1.8% for the entire year, far reduced from the 2.2% forecast given in June. Inflation at a core level, excluding car prices and accommodation, is predicted to fall at 2.2%, which is down from the 2.4% estimate given in the previous suggestion.

The Cause of the Issues

Economists have suggested that the decline in tourist activity, particularly from areas such as China, has affected the sector’s contribution to the GDP. However, the banks hope that tourism may recover during the second half of the year, helping to boost retail sales too.

The manufacturing sector could also benefit from a serious rebound, and a senior economist at Barclay’s bank has suggested that the electronics supply chain will be essential to this. For example, when Apple’s iPhone 6 hits the market, a wave of launches is expected to take place trying to compete with Apple’s new prize possession. Furthermore, the sale of game consoles around the world should help to contribute to the demand for chips that are produced in Singapore.

The estimated growth for 2015 is currently set at around 3.7% for GDP, down from the previous estimate of 3.9%. MAS core inflation, and headline inflation are set to be 2.5% and 2.2% respectively.

The really bad news about Singapore is that you still cannot chew gum there, but at least they are free, unlike the people in China.