Singapore's economic outlook for 2018 remains positive despite global trade risks: MAS

SINGAPORE - Singapore's economic outlook for 2018 remains positive despite global trade risks, said the Monetary Authority of Singapore (MAS) in the April edition of its half-yearly macroeconomic review released on Friday (April 27).

It reiterated its expectation for full-year gross domestic product growth to come in "slightly above the middle of the forecast range" of 1.5 per cent to 3.5 per cent.

The review comes two weeks after the MAS tightened monetary policy for the first time in six years, after two years of neutral policy. Core inflation is expected to rise gradually for the rest of the year, and to come in at the upper half of the forecast range of 1 to 2 per cent.

With global final demand expected to stay firm in 2018, the trade-related sectors will anchor growth, said the MAS in its review.

In modern services, digital activities have emerged as an important growth engine. With more firms investing in technology, the ICT and professional services industries will also benefit, it added.

And as the labour market improves, consumer spending is expected to pick up.

On the global front, MAS noted that the recent escalation of rhetoric from the United States and China has stoked fears of protracted trade tensions. While the direct impact from announced tariffs should be limited, a loss of confidence could curtail investment and hit consumer spending, dampening global growth and posing "some downside risk" for Singapore, it said.

"Nonetheless, barring a significant escalation of trade and other geopolitical tensions, domestic GDP growth is expected to continue on a steady expansion path for the rest of the year," it concluded.