Sustainable growth seen for Singapore: economists

Singapore's leaders have warned it is a prime target for a terror attack because of its strong stand against terrorism and reputation as a regional financial centre.

PETALING JAYA: The outlook for Singapore’s economy is picking up after the island-state narrowly avoided a recession with a 0.4% growth for the second quarter ended June 30 quarter compared to the first quarter’s 1.3% contraction.

Morgan Stanley Research economists said in a note that they expect gross domestic product (GDP) to pick up to 2.7% this year and 2.9% next year on a more conducive external environment.

GDP expanded 2.5% for the second quarter compared to the same quarter of last year, which was also revised to 2.5% from 2.7%. 

They believe that Singapore’s export-oriented economy will be “well-positioned” to benefit from the rising external tide amid a synchronous recovery both in developed markets and emerging markets ex-China.

This includes a recovery in capital expenditure as well as a spillover effect from exports into domestic demand.

Meanwhile, AmBank Research chief economist Anthony Dass said in a report that there could be room for an upward revision of GDP numbers as the data released last week captured only two of the three months of the second quarter.

He said much will depend on the June data.

Singapore’s Straits Times Index rose for a second consecutive session to hit a near two-year high, led by financial stocks after the republic announced its non-oil domestic export for June 2017 rose 8.2% compared with a year ago. 

Also, electronic exports for June 2017 gained 5.4%.