What now? Analysts lay their forecasts following Q1 GDP reveal
They still predict growth for 2022 but warn of inflation threats.
After Singapore's economy saw moderate growth of 3.4% in the first quarter of 2022, OCBC Bank said the economy growth will improve to around 4.7% year-on-year in second quarter of this year because of less stringent border controls.
According to its analysis, the financial services firm said full-year growth still likely to come in within the official 2022 gross domestic product (GDP) growth forecast of 3% to 5% year-on-year.
Whilst the Monetary Authority of Singapore (MAS) cited that economy fully recovered to pre-COVID-19 levels, OCBC warned that inflation is still a "bugbear" for businesses and houses.
Echoing OCBC, UOB, another banking firm in Singapore, the threat of inflation remains on the table amidst the MAS' tightening of monetary policy on 14 April.
It noted that as core inflation is projected to increase 2.5% to 3.5% in 2022, it sees MAS to further steepen Singapore dollar nominal effective exchange rate gradient in the October policy statement.
Ratings firm, Moody's, said it projects Singapore's GDP will likely moderate from last year as external shocks weighing on highly trade-reliant economy. The domestic sector will then pick up as Singapore eases COVID-19 restrictions, added Moody's.