[SINGAPORE] Private-sector economists’ forecasts for Singapore’s full-year 2025 growth and inflation fell sharply in the latest quarterly survey published by the Monetary Authority of Singapore (MAS), compared to the previous quarter.
The median growth forecast fell to 1.7 per cent – dragged down by an anticipated manufacturing contraction – from 2.6 per cent previously, in the latest quarterly survey of professional forecasters on Wednesday (Jun 18).
Inflation expectations have also plunged: to 0.8 per cent for core inflation, down from 1.5 per cent in the last survey, and 0.9 per cent for headline inflation, down from 1.7 per cent.
Accordingly, more economists now expect the MAS to further ease monetary policy at its next quarterly meeting in July.
Still, the latest expectations remain within official forecast ranges of 0 to 2 per cent for gross domestic product (GDP) growth, and 0.5 to 1.5 per cent for both headline and core inflation.
The latest survey was sent to 25 professional forecasters on May 22, and received 20 responses. The survey reflects their views and not those of MAS.
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Sectorial projections
In the latest survey, growth expectations for all sectors worsened. In particular, manufacturing is predicted to shrink 0.3 per cent, in contrast to the 2.9 per cent growth expected in the March survey.
Forecasts fell to 3.3 per cent for finance and insurance, from 4 per cent before; 2.2 per cent for wholesale and retail trade, from 2.7 per cent; and 1.5 per cent for accommodation and food services, from 2 per cent.
The forecast for construction fell marginally to 3.3 per cent, from 3.4 per cent before.
In line with poorer expectations for manufacturing, the growth forecast for non-oil domestic exports also worsened to 1 per cent, from 2.8 per cent before.
The expected overall unemployment rate for the year rose slightly to 2.2 per cent, from 2 per cent in the last survey.
In Q2 2025, GDP is expected to grow 3 per cent on year. Headline inflation for the quarter is predicted to be 0.9 per cent, and core inflation is forecast at 0.7 per cent.
For 2026, respondents expect GDP growth to remain at 1.7 per cent, while headline inflation and core inflation rise to 1.5 per cent.
Higher chance of monetary policy loosening
Alongside the dimmer growth outlook, 57.9 per cent of respondents expect monetary policy to be loosened in July’s upcoming policy meeting.
Most of them expect this to happen via a flattening of the slope of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, while two expect the slope to be reduced but not flattened.
This is in contrast to the March survey, where most expected it to be unchanged. In its last quarterly meeting in April, MAS eased monetary policy for the second straight time by reducing the slope of the band.
One respondent expects the policy band to be re-centred lower in July – indicating a fundamental change in the path of growth and inflation – while two expect this to happen in October.
Similar to the last survey, only one respondent expects the band to be widened in July – a move taken when uncertainty is expected to persist.
Geopolitical tensions, including from escalating trade tensions, remained the most-cited downside risk to the domestic outlook, named by all respondents – just as in March’s survey. All respondents also named it the top downside risk.
An external slowdown was the second most-cited downside risk, flagged by 37.5 per cent of respondents, followed by tighter financial conditions at 25 per cent.
The most-cited upside risk was the easing of trade tensions, named by 87.5 per cent of respondents, up from 33.3 per cent in the last survey. Some 81.3 per cent also named it the top upside risk.
Other key upside risks were better-than-expected external growth, raised by 43.8 per cent of respondents; China’s growth, raised by 31.3 per cent; and the sustained tech cycle upturn, raised by 31.3 per cent.
