Monday, September 22, 2008

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Singapore Economic Growth Forecast for 2008 as low as 2.8%

A recent poll conducted by The Straits Times of private sector economists shows that Singapore economic growth will likely come in under 4%, with some downgrading their forecast to as low as 2.8%.

The official forecast for Singapore economic growth is still a 4%-5%, but Trade and Industry Minister Lim Hng Kiang has already said full-year growth may dip below the forecast.

PRIVATE sector economists are turning increasingly bearish on Singapore’s economic outlook in 2008 with the weaker-than-expected performance in exports and tourism, which is likely to be further aggravated by the recent Wall Street meltdown.

Citigroup economist Kit Wei Zheng has cut the Singapore economic growth forecast for 2008 to 2.8% and for 2009 to 2.5% , as ‘ripples from the credit crunch hit home’ and trigger a longer and deeper downturn that had been expected earlier this year.

Barclays' Mr Leong Wai Ho is banking on a ’significant pharma-led bounce’ Q4 2008 to materialise a just over 4% growth, the highest forecasted growth among those polled.

DBS Bank economist Irvin Seah said that the latest round of upheaval in the financial markets, triggered by Lehman Brothers’ collapse last week, has sharply increased the risks for Singapore economy.

Exports fell in Aug 2008 by the most in 20 months, plunging ~14% year-on-year and the fourth straight month of decline. Tourist arrivals also dropped for the third consecutive month in Aug 2008 hit by the global economic slowdown. These figures have made economists increasingly convinced of the possibility of a technical recession in the third quarter, defined as two consecutive quarters of negative growth.

What the final number hinges on is the highly unpredictable pharmaceutical industry, which could still swing things either way in the last quarter, said economists. Always a wild card, this sector - which accounts for about 6% of gross domestic product - has now become pivotal, especially since they cannot put a figure to it.

May also want to read:
History of Singapore Property 1960 to 2008
HDB Resale flats Price Index 1990-2008: Graph & Chart
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


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