OCBC confirms PM Lee's gloomy forecast for 2011

The bank is keeping its 4-5% growth prediction for the economy even as it revised its 3Q GDP growth to 10.6% yoy (-18.7% qoq), versus advance estimate of 10.3% yoy (-19.8% qoq).

In a statement, the bank said that despite the revision, the number is still below its expectations of +11.5% yoy(-17% qoq).

With the SGD NEER is currently trading +2.7% on the stronger side of parity band and the revision in Q3GDP data, OCBC is expecting the economy to grow 14.6%  for 2010.

In contrast, the government is confident of 15% yoy growth this year (which is the top end of its 13-15% range on an anticipated recovery inpharmaceuticals and financial services sector), and expects 4-6% yoy growth in 2011 on the back of robust domestic demand in Asia (our forecast:4-5% yoy for 2011).

PM Lee earlier said during the ASEAN Summit in Japan that Singaporeans cannot expect the economy to experience double-digit growth like it did this year.

"Even if the external conditions are strong, we are not able to expand so quickly unless you are prepared to take in more foreign workers and take the risk of overheating. So we have to moderate down. And I think our estimate of 3 to 5 per cent growth for the medium term is still a good one. If we can do that, we would be doing well,” PM Lee said.