UOB predicts Singapore GDP growth to nudge higher to 3%

Find out the rationale behind this fearless forecast.

According to UOB, its Economic Treasury Research (UOBETR) forecasts Singapore’s GDP to grow 3% in 2013, higher than 2012’s forecast of 1.5%. Consensus range for 2013 is 1.6-4.5%. 

With the slate of mixed datapoints emanating out of Singapore (weak NODX and Industrial Production) and the recent property cooling measures, UOBETR thinks there is potential downside risk for its 2013F GDP forecasts should global recovery remain lacklustre.

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Hence, Singapore’s 2013 GDP could come in closer towards the low end of consensus estimates. Nevertheless, our base case is for global growth to recover and stabilise with no financial dislocation.

The FSSTI did well in 2012, rising 20% yoy and outperforming the FTSE ASEAN as well as key developed markets. Within ASEAN, the FSSTI outperformed Malaysia and Indonesia in 2012.

Given expectations that Singapore’s 2013 GDP and corporate earnings growth are likely to trail its ASEAN peers’ as well as key indices such as Hang Seng Index (HSI), FSSTI may lag regional markets in 2013 after its solid performance in 2012.

The Singapore market could also see some near-term headwinds from the recently announced property cooling measures.