ECONOMY | Staff Reporter, Singapore

MTI expects economic growth to slow down this year

GDP growth forecast is set at 1.5 to 3.5%.

The pace of growth in Singapore economy is expected to moderate in 2018, according to the Ministry of Trade and Industry (MTI).

The MTI highlighted global and domestic issues that will hurt the country’s economy.

Whilst global macroeconomic risks receded at the end of 2017, the agency noted that are there still some downside risks that could weigh down the global economy if they happen.

“First, concerns over protectionist sentiments and in particular, the US administration’s trade policies remain. An increase in trade barriers could adversely affect global trade, with spillover effects on economic growth worldwide. Second, an upside surprise in inflation could cause monetary policy in the US to normalise faster than expected. This could in turn cause global financial conditions to tighten more than anticipated, and potentially lead to sharp corrections in financial markets. Should this occur, regional economies with elevated debt levels could be disproportionately affected, and there could be some pullback in investment and consumption growth in these economies,” explained MIT.

Locally, the agency expected the pace of growth for electronics and precision engineering clusters, and externally-oriented services sectors to slow down whilst growth in information & communications and education, health & social services sectors are expected to remain resilient.

Moreover, the manufacturing sector is seen to support the growth of country’s overall economy in 2018.

In line with this, MTI maintained 2018 gross domestic product (GDP) growth forecast at 1.5 to 3.5%, though growth is expected to come in slightly above the middle of the range. 

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