Economists forecast upward revision in GDP estimates

Nomura expects MTI to raise its full-year forecast to 2%-3% from 1%-3%. 

Economists anticipate better performance for Singapore in H2, projecting GDP growth to rise to 3.1% YoY, compared to 3.0% in H1 2024, despite less favourable base effects.

With the global tech turnaround lifting manufacturing output and exports, Nomura projects GDP growth to average 1.3% QoQ in Q3 and Q4, compared to 0.3% in the first half.

"Taking into account the flash estimates for H1 growth and the improving GDP growth trajectory in H2, we expect the MTI to raise its full-year GDP growth forecast to 2%-3% from 1%-3% and likely assess that 2024 GDP growth will average within the upper half of this narrower forecast range," Nomura said, adding that it expects MTI to announce the revision in August.

RHB also predicts a resilient H2 GDP, citing three reasons.

RHB underscored that Singapore has a sizeable exposure to the global economy from trade and investment activities and would benefit from the resilient global GDP growth led by the US (+2.5%) and China (+5.0%) in 2024.

The expert added that a possible US Fed Funds Rate reduction in Q4 2024 could also boost investment flows into ASEAN and Singapore, spurred by cheaper borrowing costs and increased risk appetite.

Lastly, RHB said the "global inflation pressures should stage a gradual dissipation over the same period, which may give rise to Singapore’s import-reliant economy to see lower producer and import prices and support real rates."

Taking into account these factors, RHB predicts a full-year GDP growth of 2.5%, at the upper range of the current government estimate.