Economists raise Singapore 2013 GDP growth outlook to 2.8 pct-MAS survey

Wed Mar 20, 2013 4:00am GMT

* GDP seen growing 2.8 pct in 2013 vs 1.3 pct in 2012
    * Q1 GDP seen at +0.8 pct y/y
    * 2013 inflation seen falling to 3.8 pct from 4.6 pct in
2012
    * Singapore dollar seen strengthening to 1.200 by end-2013

    SINGAPORE, March 20 (Reuters) - Singapore's economy will
likely grow at a slightly faster pace this year than expected
earlier, helped by a pick-up in manufacturing and financial
services, a central bank survey released on Wednesday showed.
    Singapore, a wealthy city-state of 5.3 million people, twice
came close to falling into recession last year as global demand
for electronics plunged and weak financial markets took a toil
on investment banks.
    The electronics industry has shown signs of stabilising,
however, with a key semiconductor industry gauge turning
positive in January and U.S. retail sales expanding at their
fastest clip in five months in February.
    Economists now expect Singapore's gross domestic product
(GDP) to grow 2.8 percent this year, slightly higher than the
median estimate of 2.7 percent in the previous poll, according
to the Monetary Authority of Singapore's (MAS) latest quarterly
Survey of Professional Forecasters.
    The bulk of growth is likely to come in the second half of
the year, however, with economists forecasting 0.8 percent
year-on-year growth for the first three months of 2013.
    Singapore's economy expanded by 1.3 percent last year, hurt
by tepid growth in manufacturing and financial services of just
0.1 percent and 0.5 percent, respectively. For 2013, the median
estimate of economists is for manufacturing to expand by 3.3
percent and financial services to grow by 3.0 percent.
    Manufacturing contributes to around 20 percent of
Singapore's GDP while financial services account for about 12
percent.
    Meanwhile, inflation is likely to dip to 3.8 percent this
year, unchanged from the previous survey, but down from 2012's
4.6 percent.
    MAS conducts its survey every quarter after the release of
economic data for the preceding three-month period. The median
forecasts in the latest report were based on the estimates of 21
economists.
    Singapore's official forecasts are for growth of 1-3 percent
this year and inflation of 3.5 to 4.5 percent.
    Most economists expect Singapore will face several years of
slow growth and relatively high inflation as the government
reins in immigration amid a backlash from locals unhappy about
crowded trains and competition for jobs that has depressed wages
at the lower end.
    To help keep inflation in check, MAS is likely to persist
with its policy of letting the Singapore dollar rise against the
currencies of its main trading partners.
    According to the MAS survey, the Singapore dollar is
likely to end the year at 1.200 to the dollar, strengthening
from current levels of around 1.250.
    
 2013                         December   Current
 (year-on-year percentage     survey*    survey*
 change except for exchange             
 rate)                                  
 GDP                            2.7        2.8
 - manufacturing                3.0        3.3
 - finance and insurance        2.5        3.0
 non-oil domestic exports       4.3        4.0
 CPI (all items)                3.8        3.8
 MAS core inflation             2.2        2.0
 unemployment (end-period)      2.0        2.0
 exchange rate (SGD per USD)   1.200      1.200
 bank loans                     11.9      14.8
                                            
 *Median Estimates
    For full details, please check www.mas.gov.sg

 (Reporting by Kevin Lim; Editing by Kim Coghill)
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