Economists at ANZ Bank are revising upwards the 2021 GDP growth forecast for Singapore to 6.6%. Additionally, they forecast the Singdollar to strengthen to 1.30 against the USD by the end of 2021.

Singapore is still on track for 6%+ GDP growth in 2021

“We are revising upwards our 2021 GDP growth forecast to 6.6% (from 6.3%). A much stronger start to the year, very favourable external demand conditions, and our confidence that domestic activity will rebound strongly after the Phase 2 (Heightened Alert) restrictions are lifted form the basis for our optimistic view.”

“Given our view that the USD is set to weaken further, we forecast USD/SGD to end 2021 at 1.30.”

“From a medium to longer term perspective, we expect the SGD to continue to appreciate. For a start, the normal stance of MAS policy is for a gradual and modest appreciation of the S$NEER. This imbeds an inherent upward bias in the currency.” 

“We expect Singapore’s fiscal position to improve quickly and move back into surplus by FY2022, while the current account surplus remains large. In contrast, the twin deficits in the US are set to remain elevated.” 

“The relative net international investment positions of both countries have deviated substantially in recent years. This argues for a structurally stronger Singdollar over time.

 

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