Despite the upbeat national mood ahead of Singapore 50th birthday celebrations next month, economic sentiment is souring in the city-state, with analysts dramatically downgrading full-year gross domestic product (GDP) forecasts.
DBS, Southeast Asia’s biggest lender by assets, now expects a 2.4 percent expansion in 2015, from 3.2 percent previously forecast. In a report last week, the bank said if Singapore’s growth came in in line with its estimate, it would be its slowest growth since the global financial crisis. IMA Asia is even more bearish, calling for 1.9 percent growth, down from a previous 2.4 percent forecast. In comparison, the government’s forecast is for a 2-4 percent expansion this year , on top of 2.8 percent growth in 2014.
The downgrades precede Tuesday’s release of official advance GDP estimates for the April-June quarter. Consensus opinion is for a 2.7 percent annualised increase, according to a central bank survey in June, a tad better than the first quarter’s 2.6 percent expansion. But even that is too optimistic, argued Citi economist Wei Zheng Kit. He’s only expecting a 1.7 annnual boost for the second-quarter, citing broad-based weakness across the economy.