After its worst shrinkage, Singapore sees 2021 financial rebound | Enterprise and Financial system Information
With more anticipated impulses, the government is forecasting growth of between 4 and 6 percent in 2021, but the recovery is viewed as “uneven”.
Singapore reiterated its forecast for economic growth to rebound this year after its worst annual decline since independence, signaling that the recovery is on the right track while further stimulus expected in this week’s annual budget presentation will provide further support .
The Department of Commerce and Industry on Monday maintained its forecast of 4% to 6% growth for 2021, seeing faster adoption of the vaccine in advanced economies as the US and Europe achieve population immunity in the second half of the year could year. Those gains could be offset by a grimmer regional perspective with the virus recurring in some countries.
“The economy in Singapore is expected to gradually recover in 2021,” Gabriel Lim, permanent secretary of the ministry, told reporters on Monday. The gross domestic product is unlikely to return to pre-Covid levels until the second half of the year. “The pace of recovery is also expected to remain uneven across industries.”
The Singapore dollar was stable at 1.3248 per US dollar as of 8:37 a.m. local time.
Trade-dependent Singapore has done well last year, shrinking 5.4%, the MTI said, revising its preliminary estimate from last month for a 5.8% decline. The aviation, transportation and hospitality sectors have suffered from the tourism stall and mobility restrictions – and are expected to remain weak this year, Lim said – while financial and professional services have been more resilient during the lockdown and aftermath.
“All sectors have been revised upwards, especially construction and services,” said Khoon Goh, head of Asia research at the Australia & New Zealand Banking Group in Singapore, of the GDP report. However, he noted that the data “has little impact on monetary policy” and he expects the Monetary Authority of Singapore to remain on hold all year round.
The monetary authority, which uses the exchange rate as its main policy tool, confirmed its stance remains reasonable and unchanged, deputy chief executive Edward Robinson told reporters on Monday. The next planned political decision of the MAS is in April.
Daily locally transmitted virus cases in Singapore have been hovering near zero in recent weeks, encouraging plans to welcome more visitors under various safeguards this year, while others in the region, including Indonesia and Malaysia, are grappling with spikes in the exacerbated their economic problems.
Economists in a Bloomberg poll predict Treasury Secretary Heng Swee Keat will announce another budget deficit when he announces details of the upcoming fiscal year budget on Tuesday, which is expected to include targeted support for vulnerable households and businesses.
The Singapore government said last week that its five stimulus packages announced in 2020, coupled with loose monetary policy, saved the economy from falling 12.4% or more in the past year.
- The ministry also released final economic estimates for the fourth quarter showing that GDP grew 3.8% non-annualized and seasonally adjusted for the past three months, better than the estimated 2.4% and earlier forecast of 2 ,1%. It fell by 2.4% compared to the previous year and thus better than the expected decrease of 3.6%
- Manufacturing declined 1.4% in the fourth quarter from the previous three months, services increased 4.1% and construction increased 55.6%
- In a separate report on Monday, Enterprise Singapore announced that export growth outside the oil sector will range between 0% and 2% in 2021, after increasing 4.3% in 2020
- Inflation could rise in the second quarter due to statistical base effects, MAS said