Driven by the ongoing recovery in global trade and the resilient domestic demand, the Singapore economy is expected to expand by 2.7 percent this year – surpassing last year’s two percent growth and trumping the private sector economist’s 2.5 percent estimate for this year, revealed a new report.
“We are confident that an improved external environment will help sustain Singapore’s growth – despite the drag from domestic factors,” said Mark Billington, South-east Asia director of the Institute of Chartered Accountants in England and Wales, which commissioned the report.
The institute, however, noted that growth will be uneven across different sectors, with those depending on a stronger global economy, such as financial services, having a brighter outlook, reported The Straits Times.
“A modest recovery in business investment may soon be under way, as business loans rose to 8.1 per cent year-on-year in the first quarter, the strongest growth in loans since 2014,” revealed the report produced by Oxford Economics.
Sectors heavily dependent on domestic factors, on the other hand, will need more time to be on track considering concerns on unemployment, subdued household spending growth and the softer property market.
“I am cautiously optimistic about the outlook. There are still some key risks such as protectionism, an unexpected slowdown in China’s growth or export demand, which will have a knock on impact on the factory supply chain that exists across Asia,” said Oxford Economics lead economist Priyanka Kishore.
Nonetheless, Kishore expects the long-term prospects of the ASEAN-Five – comprising Singapore, Indonesia, Malaysia, Thailand and the Philippines – to remain bright.
This article was edited by Denise Djong.