Revised forecast reflects a sharp contraction in manufacturing output, with downside risks stemming from global uncertainties.
SINGAPORE:
RHB economists have adjusted their Q2 2024 GDP growth forecast for Singapore to 2.6% year-on-year (YoY), down from the government’s advance estimate of 2.9%. This revision comes after a significant 3.9% YoY contraction in manufacturing output for June, signaling challenges in the broader economic outlook.
The decline in manufacturing has raised concerns about the economy’s overall performance in the second quarter, which could potentially impact the annual growth trajectory. Despite the revised Q2 estimate, RHB has maintained its full-year GDP growth projection at 2.5%. However, analysts caution that risks such as global trade tensions and inflationary pressures could weigh on this outlook.
In a statement to Singapore Business Review, RHB highlighted manufacturers’ increasing caution, particularly amid potential geopolitical shifts. They noted, “The higher probability of a Trump-win in the upcoming 60th US Presidential elections could lead to deteriorating risk appetite toward China and ASEAN, while triggering global inflation through US-centric protectionist policies.”
While Singapore’s economic fundamentals remain resilient, the downgrade underscores the challenges posed by external uncertainties and the need for careful monitoring of global developments.
