Singapore’s economic outlook for 2018 remains positive despite global trade risks

The economic outlook in Singapore for 2018 looks to be positive despite the risks from global trade as cited in the Monetary Authority of Singapore (MAS) within it’s half yearly macroeconomic review released this April.

A positive view point

The expectation for domestic product increase over a full year is  marginally above the forecasted figures of 1.5 percent and will be far closer to 3.5 percent over the next 12 months.

The review also highlighted positive economical expansion within the trade related sectors giving a much needed boost to the continuing global demand in the industry of electronics, especially within the areas of regional production.

This is the first review after MAS reviewed it’s monetary policy and imposed stricter guidelines as the policy had remained unchanged for the last six years, two of which were years of a neutral policy.  It is expected that Core inflation will increase over the course of the year to arrive at the upper range of the forecast of up to two percent.

The Monetary Authority of Singapore also stated in the review that global demand is expected to remain solid within 2018 thus securing growth within the trade related sectors.

Digital transformation and technological expansion continues to play a large part in modern services

As technological advancements continue, and with a surge of companies choosing Singapore as their technologies base, digital services have seen a huge increase in growth as more businesses are investing in ICT and technology based industries.

The added inclusion of many international power companies investing their technology business in Singapore in a bid to digitalize their processes has caused a spill over effect  to supporting industries which in turn has a positive impact, fueling both economic expansion and a growth in productivity.  Thus enabling the technology sector to expand and feed the expansion of support businesses from other sectors.

As a bi product of an improvement in the labour market, the average spending by consumers is expected to rise thus having a knock on effect on Singapore’s rapidly growing economy, which has seen a huge increase in consumers investing in non tradable services with a much higher value which bodes well for the foreseeable future, particularly over a longer period of time.

Looking to the future despite global tensions

Looking forward globally, MAS noticed a rise in rhetoric from global giants China and the United States which has sparked fears over extended tensions with global trade.  Any direct damage done from any reported tariffs should be minimized, however, overall investment could suffer as a loss of confidence could restrict global growth by impacting consumer spending with some risk sitting on the shoulders of Singapore.

The Monetary Authority of Singapore continues in its optimism for Singapore’s growing economy

But MAS have continued to remain optimistic about economic growth for Singapore and feels that domestic growth within the country is expected to carry on it’s predicted trend of expansion for at least another year, despite any geopolitical tensions resulting in an escalation of trade outside of Singapore.

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