Singapore's Economic Outlook

(Corrects number of economists polled to 20, not 25, in paragraph 2)

By Bing Hong Lok

SINGAPORE (Reuters) – Singapore's economy is projected to grow 3.6% this year, an increase from the previous forecast of 2.6% expansion. This projection was revealed in a survey conducted by the central bank on Wednesday.

The median forecast from 20 economists surveyed by the Monetary Authority of Singapore (MAS) anticipates a growth of 3.1% in the final quarter of 2024 and 2.6% growth for all of 2025.

Last month, the trade ministry increased its GDP growth forecast for 2024 to 3.5% from the earlier range of 2.0% to 3.0%, following third-quarter growth of 5.4%, which exceeded expectations.

Most economists surveyed believe that the MAS will retain its current monetary policy during quarterly reviews in January, April, and July.

The MAS last modified its monetary policy in October, opting to keep settings unchanged despite the uptick in growth and decline in inflation. Since tightening its policy in October 2022, the MAS has not made further changes.

Only 33% of respondents expect a potential loosening of monetary policy in January, through a reduction in the slope of the Singapore dollar nominal effective exchange rate (S$NEER), down from 50% in the previous survey conducted in September.

As the central bank for a trade-reliant economy, the MAS influences the S$NEER bands, which in turn affects the strength of the local currency against its main trading partners.

Headline inflation for 2024 is forecasted to be 2.5%, a slight decrease from 2.6% estimated in the September survey. Core inflation for this year is expected to be 2.8%, down from the previous forecast of 2.9%.

In the final quarter of this year, core inflation is anticipated to stand at 2.1% according to the survey. October's core inflation recorded a 2.1% increase compared to the previous year, marking the smallest rise in almost three years.

For 2025, economists foresee both headline and core inflation within the range of 1.5% to 1.9%.

(This story has been corrected to clarify the number of economists polled to 20, rather than 25, in paragraph 2.)