Private sector economists expect Q2 growth to be weak
Private sector economists are expecting to see a slowdown when second-quarter GDP numbers are released later this week due to weak pharmaceutical performance.
However, they said the economy is on track to meet the government’s full-year growth targets of 4 to 6 per cent.
Consistent drops in pharmaceutical production over April and May are expected to pull down GDP numbers for the second quarter.
Overall, analysts foresee a contraction, making the second quarter one of the weakest this year. However, they said a rebound could come in the second half.
Leong Wai Ho, Associate Director, Regional Economist, Barclays Capital, said: “We expect some payback from pharmaceuticals to come in from the last month of the third quarter and into the fourth quarter. But clearly, I think the key is still the broader services economy.”
The construction sector is also seen to be another lynchpin of the economy this year.
For the second quarter, Barclays Capital is expecting the economy to grow by 2.5 per cent on year.
And while it expects the quarters ahead to be soft, it said government policy response is unlikely, especially if there are no major bumps in the road ahead.
The bellwether for possible government action would likely be job losses.
Mr Leong said: “Once that happens, you can see the usual response in the way of significant physical stimulus coupled with perhaps a reduction in the employers’ contribution rate to the CPF.”
For now, most analysts expect full-year growth to fall comfortably within the government’s forecast of 4 to 6 per cent. - CNA/ms
Source : Channel NewsAsia - 7 Jul 2008
Loading ...
Post a Comment
Tell me a bit about yourself; who you are, where you're from, what information you would like to see on this site. As I continue to provide you with Singapore property happenings, your feedback will encourage me to post more frequently. Thank you.