UOB, RHB keeps growth forecast unchanged following 2.7% GDP expansion in Q1

UOB sees economy growing 2.9% this year, while RHB's estimates at 2.5%.

UOB Global Economics and Markets Research and RHB kept their 2024 growth forecasts for Singapore unchanged as interest rates will likely stay elevated for longer than anticipated.

Economists at UOB said they still expect GDP to increase 2.9% for the entire 2024, at the higher end of the 1% to 3% official estimate by the Ministry of Trade and Industry (MTI).

RHB acting group chief economist Barnabas Gan also kept his forecast untouched at 2.5% for the year, after official data showed the economy rose faster at 2.7 percent year on year in the first quarter from the 2.2% YoY growth in the fourth quarter.

UOB said tight external financial conditions and high interest rates do not bode well for export-oriented Singapore, particularly in its manufacturing, wholesale trade, transportation and storage sectors.

A meaningful recovery for these industries will only be possible should the US Federal Reserve or the European Central Bank start bringing policy rates down.

RHB shared the same view, noting that the city-state’s financial conditions at home will remain constrained if borrowing costs stay “high for longer” due to the rather slow easing of global inflation.

Singapore’s expansion will also depend on the recovery of China, and any downturn or other risks in the mainland could hurt Singapore’s externally-oriented industries.

“The delay in global disinflation momentum and a resilient economic backdrop will likely persuade the Monetary Authority of Singapore (MAS) to keep its policy parameters unchanged in 2024,” Gan said in the note.

Meanwhile, UOB said that the economic boost from tourism-related sectors like accommodation, food and retail will likely moderate for the rest of the year on the lack of blockbuster events like Taylor Swift’s concert, as well as the waning pent-up travel demand.

“Base effects continue to remain favourable in 2Q while growth momentum could strengthen in 2H24 driven by the anticipated recovery in externally-oriented sectors as financial conditions gradually ease should central banks in the advanced economies commence their rate cut cycles,” UOB said.

Follow the link s for more news on

RHB

UOB

GDP

The people you want to reach are already in this room.

Every quarter, SBR lands on the desks of the founders, CFOs, and directors running Asia's most consequential companies. Every day, they open our newsletter and read our website. It's a room that took twenty years to build — and it's the one most of our partners are trying to get into.

The good news is that the door is open. We work with companies on thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. The shape of the right partnership depends on what you're trying to do, which is why we'd rather start with a conversation than send a rate card.

If you have something this room should know about, tell us. We'll tell you honestly whether we can help, and how.

No rate cards until we understand the brief. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia