Singapore’s economy may expand less than previously estimated in 2012, a central bank survey of economists showed, as Europe’s sovereign-debt crisis curbs demand for Asian exports.
Gross domestic product may rise 3 percent in 2012 after climbing an estimated 5.2 percent this year, according to the median estimate of 21 economists and analysts in a survey by the Monetary Authority of Singapore released today. Last quarter’s poll had a median forecast of 4.9 percent for next year.
Nations from China to Indonesia have eased monetary policy in recent weeks to protect growth as the global recovery falters. Singapore’s government has said the city-state’s economy may expand as little as 1 percent in 2012, and the central bank, which uses the exchange rate to manage inflation, said in October it will slow gains in the local dollar.
Singapore’s “export sector is facing tremendous headwinds as the malaise in Europe and the sluggish recovery in the U.S. are taking a huge toll on global demand,” Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore, said in a note today before the survey was released.
The Singapore dollar may strengthen to S$1.23 versus the U.S. currency by the end of 2012, from an estimate of S$1.28 at the end of this year, the survey showed. Inflation may slow to 3.1 percent in 2012 from a prediction of 5.1 percent this year.
The local currency has weakened 1.7 percent against the U.S. dollar so far this year. It fell 0.3 percent to S$1.3055 as of 11:22 a.m. local time, dropping for a fifth day. The benchmark Straits Times Index of stocks has lost about 16 percent in 2011.
Non-oil domestic exports may climb 3.1 percent in 2012, from 2.1 percent this year, according to the median estimates in the MAS survey.
The estimates for construction in 2012 ranged from a 6.5 percent contraction to a 3 percent increase. Singapore last week imposed additional taxes on purchases of private residential property, which threatens to curb demand for real estate.