Singapore: GDP seen expanding 5.8% in 2021 – UOB

Economist at UOB Group Barnabas Gas assesses the latest MAS Survey of Professional Forecasters.

Key Quotes

“In the latest MAS Survey of Professional Forecasters, respondents upgraded their median GDP outlook for 2021 to +5.8%, up from a previous forecast of +5.5%. Across sectors, a stronger recovery is expected for manufacturing, finance & insurance, and non-oil domestic exports. For 2022, GDP is expected to expand by 3.8%.”

“The survey results are in line with our expectations. Our forecast pencils Singapore’s GDP growth at +5.0% and +3.5% for 2021 and 2022 respectively. The positive growth outlook for Singapore is underpinned by the projected pickup in external demand, coupled with Singapore’s relatively well-controlled COVID-19 situation.”

“However, the economic recovery is likely to remain uneven for the year ahead. The construction and accommodation & food services clusters are expected to contract in the first quarter of 2021. Coupled with the slack in Singapore’s labour conditions, domestic consumption is likely to stay lacklustre in 1Q21 as well.”

“The survey also highlighted risks to Singapore’s growth prospects, which include (1) a deterioration in the COVID-19 situation, (2) a worsening geopolitical environment, and (3) a pre-mature pullback in global macroeconomic policy support.”

“Notwithstanding the downside risks, factors that may accelerate Singapore’s economic recovery include a faster-than-expected containment of the COVID-19 outbreak, strong manufacturing performance driven by electronics, and the eventual re-opening of borders to international travel.”