Economist announced that Singapore’s economic growth rose approximately 3.1% over the last three months of 2017. Then, thanks to the growth in manufacturing, it rose slightly more though overall growth has been quite slow. This slight growth was higher than anticipated but lower than the quarter before at 5%. The growth rate was in accordance with findings by the MTI (Ministry of Trade & Industry).
The Prime Minister stated that Singapore’s 3.5% was double what was originally forecasted due to the increase in global growth. Although both manufacturing and construction have moved to a crawl, it is estimated that Singapore’s growth is through the service sector which is expected to continue in 2018. The external service sectors are growing faster than domestic services such as business growth.
Although economists are optimistic about economic growth, caution should be shown as there are several risks that could harm Singapore’s economic growth. One very concerning risk is the continual drop in China’s investments.
Other potential risks could come from the recent US interest rates and equity valuations. The continuation of interest rates may cause a negative effect on wealth, especially if there is a decline in the asset markets. During the PAP convention, the Prime Minister pointed out that the government’s expenditure is rising rapidly and will continue to rise during the next few years. This could be affected by the government’s tax increase due to economic growth but show signs of higher wages during 2018.
There is anticipation that the Goods and Services Tax might rise to 8% over the preceding 7% seen in April of 2017. That said, there could be a negative effect on the economic growth leading to higher inflation.
With steps in place to move toward higher growth, externally and domestically, Singapore remains optimistic but retains its forecast of a 2.5% growth. The economic growth rose to 3.1% over the past three months which was higher than economists expected at 2.6%. They are expecting a stronger economy in both the US and EU to offset the slowdown from China’s domestic demands and their electronics manufacturing.
There should be a significant increase in business investment spending due to the United State’s recent Tax Reform. This should support Asia and Singapore’s export growth over the coming year, especially considering the strong relationship between the US investment spending and regional exports.
Economists expect to see an improvement in domestic demand and private consumption should accelerate over the coming months. This acceleration should be directed by the improved labor market, slow impact on strong export performance, and the strengthening of the property market even if there are tax hikes along the way.
New launch condos in 2018
Existing new launches