Downside Risks Well Contained But Growth To Remain Slow In 2H

Economic Research	17 June 2016
Singapore
Economic Outlook
Downside Risks Well Contained But Growth To Remain Slow In 2H Singapore’s economy almost stagnated in 1Q, expanding 0.2% q-o-q annualised, after surging 6.2% the quarter before. Both domestic and external demand contracted on a q-o-q basis. However, in our opinion, it was the steep slump in the services sector which compelled the Monetary Authority of Singapore (MAS) into letting the SGD to depreciate. Going forward, the weaker SGD is likely to help stabilise services sector growth in 2H, while we envisage for the manufacturing activity to continue on its recovery path, supported by easing supply side dynamics and improving external demand. We expect real GDP to grow by 2.1% y-o-y in 2H, compared with 1.6% estimated for 1H, and maintain our projections for the economy to expand 1.8% in 2016, albeit slowing slightly from its 2.0% climb last year. Economist:  Ng Kee Chou | +603 92802179
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