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Economists cut growth forecast for Singapore economy to 1.9%

Economists polled by the Monetary Authority of Singapore (MAS) are cutting down their growth forecast for the economy for 2016 from 2.2 percent to 1.9 percent, the central bank’s latest quarterly survey revealed Wednesday (16 March).

“As reflected by the mean probability distribution, the most likely outcome is for the Singapore economy to grow by between 1.0 to 1.9 percent this year, below the 2.0 to 2.9 percent range reported in the last survey,” the MAS said.

Manufacturing is now expected to shrink by 2.7 percent this year, worse than the previous median forecast of a 1.2 percent contraction compared to the same quarter last year, down from 1.8 percent forecast in the previous survey. In addition, economists also forecast a slower growth in the finance and insurance sector at 3.6 percent, compared to 5.9 percent previously.

The survey also showed that economists expect the country’s gross domestic product (GDP) growth for the first quarter to come in at 1.6 percent.

Singapore’s GDP growth came in at 2 percent last year—the weakest annual growth since 2009—when it shrank 0.6 percent following the global financial crisis.

But analysts expect the GDP to expand by 2.5 percent next year.

“The most likely outcome is for the Singapore economy to grow by 2.0 to 2.9 percent next year,” MAS said.

Meanwhile, in terms of currency, economists expect the Singapore dollar to trade at S$1.45 against the greenback by the end of the year.

The survey conducted by MAS received views from 24 respondents from economists and analysts who closely monitor the Singapore economy.

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