Singapore's 2013 GDP growth forecast upgraded

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http://www.todayonline.com/singapore/singapores-2013-gdp-growth-forecast-upgraded-25-35

The Ministry of Trade and Industry (MTI) announced today that it has upgraded the GDP growth forecast for 2013.

While economic growth in the advanced economies came in slightly weaker than expected in the first half of the year, global macroeconomic conditions are expected to pick up gradually in the second half.

In the US, the economy is expected to grow modestly, supported by private domestic demand.

While the Eurozone is expected to remain in recession, improving sentiments and economic activity point to a potential easing of the downturn in the coming months.

In Asia, the growth outlook for China looks fragile as recent policies to rein in credit expansion could potentially weigh on investment growth.

For the ASEAN economies, growth is likely to remain modest, supported by resilient domestic demand.

Against this macroeconomic backdrop, the growth outlook for the Singapore economy is expected to improve slightly. Externally-oriented sectors like manufacturing and transportation & storage are likely to provide support to growth, in line with the gradual pickup in the global economy. Domestically-oriented sectors such as construction and business services are also expected to remain resilient.

Nonetheless, risks to the global growth outlook remain.

As China adjusts its policies to promote more sustainable growth, unintended consequences, such as an excessive tightening of liquidity, could lead to a sharp slowdown in growth. This could in turn have spill-over effects on other export-oriented Asian economies.

In the US, it is unclear whether markets will adjust to a tapering of the quantitative easing programme in an orderly fashion.

Barring these downside risks, the Singapore economy is expected to grow by 2.5 to 3.5 per cent in 2013.