Sub-par GDP growth to persist in 2015 as headwinds intensify

Expect a volatile year ahead.

Singapore’s sub-par economic growth will continue in 2015 amid a more volatile market. DBS notes that increased volatility could be seen this year as key central banks across the world are expected to unveil divergent monetary policies.

The global economy has been sluggish over the past 12 months and domestic restructuring has been a pain. But Singapore's GDP growth trajectory has been relatively flat with sequential growth averaging about 1.5% QoQ saar per quarter. Yet, 2015 will be different. It'll be more volatile. Most notably, 2015 could see the divergence in monetary policies across key central banks around the world.

DBS stated that Such divergence in global monetary policies will have significant impact on the financial markets. Interest rate expectation will fluctuate and currencies will be volatile, and lower oil prices will only provide a mild upside.

“Singapore being a small and open economy will be like a small boat in a rough sea. Amid such uncertainties and barring any negative shock, overall GDP growth is expected to average 3.2% in 2015. While slightly higher than 2014, that is still sub-par growth by Singapore's standard,” the report noted.