March 9th 2011 - "Economists expect Singapore's economy to expand 5.7% for 2011 ..."
Rachel Kelly - Channel News Asia
Singapores private sector economists expect Singapore's economy to expand by 5.7 per cent for 2011, an upgrade from the 5.1 per cent
median forecast in the previous survey released in December. This comes in at the top end of the government's forecast of four per cent to six per cent
growth in 2011.
The economists were polled by the Monetary Authority of Singapore (MAS) for its latest survey of professional forecasters. For the first
quarter of this year the respondents expect GDP to expand by 5.9 per cent, an upgrade from the 4.9 per cent in the December survey. However, while
the economists expect the economy to grow, they are also forecasting CPI inflation to come in at four per cent in 2011, up from 2.9 per cent in the
previous survey.
For the first quarter of 2011, inflation is expected to come in at 5.4 per cent.
Experts said inflation would continue to be a regional concern, going forward. Capital Economics Asia economist Vishnu Varathan
said: "I think inflation continues to be the main policy worry for Singapore or for the region as a whole. "I think what needs to be assessed and quite
correctly at that, is whether oil prices will remain high, and question of how high, and for how long, because if that is going to be long enough and at
a certain level, then that would of course feed into inflation.
"That is a huge risk that policy makers will keep their eyes on and naturally, that has shifted a higher likelihood that the MAS will
shift its policy again. That ties in with the stronger sing dollar that is being expected now"
The government last month had revised its inflation forecast for this year from 2.0 to 3.0 per cent to 3.0 to 4.0 per cent, and said
inflation may rise further to 5.0 to 6.0 per cent in the first few months of 2011. The economists expect the Singapore dollar to end 2011 at S$1.23 to a
US dollar, from a forecast of S$1.24 in the earlier survey.
The economists have also upgraded their forecast for the manufacturing, wholesale and retail trade, and hotels & restaurants sectors.
They have, however, downgraded their forecast for construction and financial services. The respondents have kept their outlook unchanged for the labour
market, with unemployment rate expected to be two per cent by the year end.
Looking into 2012, the respondents forecast GDP growth to be at six per cent, and CPI inflation at 2.8 per cent.
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