Investment growth to suffer 3.5% decline in 2017

Blame it on underwhelming trade activity.

Singapore economy has been treading at a slow pace of growth for the past quarters, with overall GDP growth at 2.1% in Q2. With its weak trade activity, anticipated spending in 2017 is expected to fall into a 3.5% slump.

According to the latest Economic Insight of Institute of Chartered Accountants in England and Wales (ICAEW), even though overall spending is augmented by substantial public investment, the city-state could look forward to a gloomy business investment in the coming year due to the disappointing trade activity.

"Singapore’s economy has been running at a sub-trend pace of growth for the past few quarters, reflecting weak regional trade and a correction in the housing market," the report said.

As the city-state has an export-dependent economy, the appreciation of the Singapore dollar would add to the challenges facing the economy, notably the manufacturing sector.

However, a sharp rebound is to be expected in 2018, as regional trade would have gathered more steam by that time.

Based on Oxford Economics ‘Control Risks Economic and Political Risk Evaluator’, Singapore scores well on economic and financial risk metrics, boding well for sustainability of growth in the republic.

The report added that a buoyant service sector should also support an acceleration of GDP growth to 2.2% in 2017 as global trade gradually improves.

"Singapore is well placed for financing investment spending in the years ahead. In order to support Singapore’s investment and growth in the medium term, the government will need to ensure that credit supply remains sustainable and is channelled to the most productive sectors,” the report noted.