Singapore economy expected to grow 1-3% this year

Manufacturing and transportation would likely give the year a boost.

After the 2% full-year GDP growth of Singapore, the Ministry of Trade and Industry expects the economy is expected to grow at a modest pace of 1-3% for this year.

According to MTI, the growth will come as the US economy is projected to grow at a faster pace in 2017, supported by domestic demand and expected fiscal stimulus under the new US administration.

"Global growth is projected to pick up slightly in 2017. In particular, growth in the US and key ASEAN economies is expected to improve, even as growth in China continues to moderate," the trade ministry noted.

However, the MTI also noted of the uncertainties and downside risks in the global economy. It cited the rise in political risks and economic uncertainties. It noted that upcoming elections in key Eurozone economies may create further uncertainties regarding the future of the monetary union. There are also signs of a rise in anti-globalisation sentiments.

"These uncertainties may, in turn, weigh on business and consumer confidence, thereby dampening investments and consumption, and causing a pullback in global growth," MTI said.

Against this global backdrop, Singapore can depend on its externally-oriented sectors such as manufacturing and transportation & storage sectors for growth this year. In particular, the strong semiconductors segment and the improvement of trade flows will spur growth in the said sector.

Meanwhile, the outlook for the construction sector has weakened on the back of the drop in contracts awarded in the last two years, due to sluggish private demand. Headwinds are also against the way of some sectors such as the marine & offshore, retail and food services sector.