ASEAN KEY DESTINATIONS
Singapore's growth in 2017 to be fuelled by external demand: MAS
SINGAPORE: Trade-related sectors - especially those associated with information technology - will drive Singapore’s economic growth in 2017, according to the Monetary Authority of Singapore (MAS).
In its half-yearly macroeconomic review released on Thursday (Apr 27), the central bank said Singapore's GDP was expected to come in at about 1 to 3 per cent this year.
MAS said the faster pace of global economic activity should benefit trade-related sectors. For instance, electronics are expected to see a boost from new mobile phone product launches.
Recovery in the rest of the manufacturing sector, however, is expected to remain “patchy” in the near term, said the central bank.
Meanwhile, the review also found that the outlook for Singapore’s trade partners was looking up. For instance, stronger labour numbers from the US suggested consumption growth remained supported, said MAS.
Growth in Asia was also projected to expand by a stronger 4.8 per cent in 2017, with external demand re-emerging as a growth driver for the region.
On the home front, the report predicted domestic-oriented sectors would register more muted growth.
MAS noted that domestic economic activity had improved over the last two quarters, although this was uneven across the different industries.
Looking forward, retail and food services will face cyclical and structural challenges amid a soft labour market, subdued consumer confidence and greater competitive pressures, it said.
For the year as a whole, average prices are expected to be higher than 2016. Singapore's inflation as measured by the consumer price index (CPI) is forecast to come in at 0.5 to 1.5 per cent, while core inflation, which excludes the cost of accommodation and private road transport, is projected to be 1 to 2 per cent.
Energy-related items will be the main driver of the projected rise in the CPI. Other domestic business costs are also likely to rise "modestly" this year, partly due to administrative price increases such as the hike in water prices, MAS said.
However, the central bank added that amid the soft economic environment and labour market, the impact of higher external and domestic costs on consumer prices should be muted.
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