Moody’s projects Singapore real GDP growth for full year at 2.5pct

18-Aug-2017 Intellasia | The Business Times | 6:00 AM Print This Post

FOLLOWING an economic expansion of 2.7 per cent year-on-year in the first half of 2017, Moody’s projects real GDP (gross domestic product) growth for the full year at 2.5 per cent, the midpoint of the government’s forecast of 2-3 per cent. It believes that external demand will continue to support expansion.

“Over the longer term, Singapore faces similar structural challenges to other high-income economies, including an ageing population and consequently larger expenditure outlays over the long term. A track record of fiscal prudence and large fiscal buffers in the country’s sovereign wealth funds provide significant flexibility,” it said.

Singapore’s “Aaa stable” credit profile reflects the city state’s very high per-capita income, diverse and competitive economy, strong fiscal metrics, and robust institutions, Moody’s said on Thursday.

“Singapore currently benefits from the cyclical pickup in external demand, but domestic demand remains muted. In response, the government has implemented targeted assistance to households and other sectors, while adhering to its prudent fiscal framework that prohibits financing deficits through debt.

“Ongoing economic restructuringwhich intends to shift Singapore away from a historic reliance on the inflow of foreign labour, while concurrently increasing labour productivityalso contributes to lower, albeit less volatile, growth,” it said.

It added that Singapore’s susceptibility to event risk is “very low”, reflecting the country’s strong external buffers, relatively sound banking system and stable political environment.


Category: Singapore

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