Economy to grow by 4.1%: Standard Chartered

The retail, real estate, and admin support sectors are expected to recover.

Singapore’s economy will grow by 4.1% in 2022, slower than the 7.0% GDP growth recorded the year previous, according to the latest forecast from Standard Chartered Bank.

Whilst this slowdown is due to the fading base effect, growth is still expected to be robust, driven by external demand, border reopenings, and the high domestic vaccination rate.

Whilst business sectors that were significantly hit by the pandemic, such as retail trade, real estate, and professional and admin support, are expected to catch up in recovering, worst-hit sectors such as construction, transportation and storage, and accommodation and food, might continue to struggle in 2022.

For inflation, Standard Chartered forecast an average 1.9% headline inflation and 1.8% core inflation for 2022. This will be driven by rising business cost pressures and elevated import costs.

“The government may raise the GST to 9% from 7%, adding c.0.8-1.2ppt to headline inflation and c.1.7ppt to core inflation,” Standard Chartered added.

On monetary policy, the bank expects the Monetary Authority of Singapore to steepen the SGD NEER slope by another 50bps in April, to 1% per annum.

The COVID-19 pandemic continues to be a key downside risk to this outlook, along with monetary policy tightening and less expansionary fiscal policy.