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DBS lowers growth forecast for Singapore to 1.8 percent

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Staff writer ▼ | September 15, 2015
Singapore street
Economy in Asia   Singapore is a small boat in rough seas

DBS, a financial services group in Asia, has lowered its growth forecast for Singapore this year to 1.8 percent from its previous projection of 2.4 percent, reported Channel News Asia.

Describing Singapore as a "small boat in rough seas" in the report, DBS said the downgrade is on the back of rising global uncertainty.

The bank said headwinds from abroad have intensified in the last two months, as well as domestic manpower crunch and higher costs are weighing on the manufacturing and services sectors. The likelihood of a technical recession in the third quarter has climbed significantly, said DBS.

With slower economic growth and rising disinflationary pressure, the bank expected that the Monetary Authority of Singapore to ease monetary policy via a one-off downward re-centering of the policy band in October.

Ratings agency Moody's lowered its growth forecast for Singapore to 1.7 percent from 3 percent earlier this week. However, economists from other financial institutions, including OCBC, UOB and Mizuho Bank, said they are keeping their growth forecasts for now.

Singapore government has already trimmed its growth forecast for 2015 from 2 to 4 percent to 2 to 2.5 percent, noting the uncertainties ahead.


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