Economists cut Singapore’s 2023 growth forecast on risk of global slowdown: MAS survey

GDP is expected to expand by 1.8 per cent in 2023, down from the estimate of 2.8 per cent in the previous survey involving private-sector economists.

Economists cut Singapore’s 2023 growth forecast on risk of global slowdown: MAS survey
A general view shows the city skyline in Singapore on Dec 1, 2022. (Photo: AFP/Roslan RAHMAN)

SINGAPORE: Private-sector economists have cut their growth forecast for Singapore next year, with the estimate that GDP will expand by 1.8 per cent in 2023.

This is down from an earlier projection of 2.8 per cent growth, amid concerns about a global economic slowdown.

In the latest survey of professional forecasters released by the Money Authority of Singapore (MAS) on Wednesday (Dec 14), spillovers from an external growth slowdown were the most-cited downside risk.

Respondents were concerned about risks from an escalation in geopolitical tensions, as well as the impact of China’s COVID-19 lockdowns and social unrest, according to the quarterly MAS survey.

The survey was sent out on Nov 23, before China rolled back its tough COVID-19 rules.

The lower forecast is in line with a worsening global outlook, with some advanced economies expected to slip into recession due to the Federal Reserve’s monetary tightening and the fallout from the war in Ukraine.

Singapore’s Ministry of Trade and Industry (MTI) said in November that the country’s economic growth is forecast to slow to 0.5 per cent to 2.5 per cent in 2023, down from the projected 3.5 per cent growth this year.

The projection of 1.8 per cent GDP growth in 2023 is half the expected growth forecast of 3.6 per cent in 2022, the MAS survey noted.

As for inflation, private-sector economists expect MAS core inflation to come in at 4 per cent in 2023. The forecast incorporates the effects of the GST increase – from 7 per cent to 8 per cent – which kicks in on Jan 1.

MAS core inflation, which excludes accommodation and private transport costs, is projected to hit 5 per cent in the fourth quarter of 2022.

According to the survey, the median forecast for core inflation for the whole of 2022 has increased to 4.1 per cent from 3.8 per cent previously, while that for overall inflation is 6.1 per cent, up from 5.7 percent in the earlier survey.

Source: CNA/cm(gs)