According to economists, Singapore’s economy is expected to see a robust 9.5 percent growth this quarter, though it will be more of a technical rebound.
Economists in the private sector who were polled in February by the Monetary Authority of Singapore produced forecasts ranging from 6.8 percent to 12 percent for the first quarter’s growth, with a 9.5 percent median and 9.2 percent average.
The survey conducted by MAS provides no details about the factors behind the forecasts, but the low-base effect is apparent. In the first quarter of 2009, the economy hit the bottom line, contracting 9.4 percent. The economy has rebounded since then, pulling out of recession towards the end of the year.
The robust growth forecasted in the first quarter by the 20 economists who responded to the MAS poll would also amount to a technical bounce-back following a brief pause during the last quarter of 2009, when the growth of the economy slipped off pace.
Kit Wei Zheng, an economist from Citigroup, believes that the Q1 GDP growth “could easily exceed 10 percent.”
He noted that the manufacturing output recorded an impressive surge of 39 percent in January, while a range of indicators in trade and tourism-related services showed signs of renewed vigour, despite weak exports.
However, Mr. Kit warns that if exports remain sluggish, resulting in excessive inventory buildup, “we could see a sharp pull-back in production going into Q2.”
Although the MAS poll does not include quarter-on-quarter numbers, the momentum measure is not likely to record a second consecutive negative figure after a dip in the fourth quarter, which would possibly result in another technical recession, or the hyped double-dip.
At any rate, the forecasts see GDP growth easing to 6.3 percent and 4.2 percent – year on year – in the second and third quarter, before recovering to six percent in the fourth quarter.
For the full year of 2010, growth is expected to have an average of 6.5 percent.
Market expectations for this year’s growth are currently bunched within the 6 percent to 6.9 percent band.
For 2011, the economists have an early prediction of 5.5 percent growth for Singapore.