Singapore's current account surplus projected to hit $80.3b in 2017

That’s equivalent to 19.2% of GDP.

According to RHB Research, Singapore recorded a balance of payments deficit of S$3.9b in 4Q16, recoiling from its S$5.4b surplus achieved the quarter before.

“Current account surplus decreased to S$18.1b, from S$22.8b in the previous quarter, dragged by a smaller goods surplus and increased services export deficit,” said RHB.

Here’s more from RHB Research:

On top of that, outflows in the capital and financial account increased to S$22.7b, from S$18.2b the quarter prior. Other investments saw intensified outflows, outweighing moderation in portfolio outflows and an increase in direct investments.

Going forward, we project for the current account surplus to expand to S$80.3b, or 19.2% of GDP in 2017, from S$78.1b or 19% of GDP in 2016, underpinned by improved exports.

At the same time, other investment outflow is expected to be large in line with Government encouragement for SMEs to internationalise.

This should also lead to an increase in demand for financial demand as a hedging tool. In aggregate, we forecast for a S$0.9b deficit in the balance of payments for 2017.