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ADB trims Singapore’s growth forecasts for 2015, 2016

SINGAPORE — The Asian Development Bank (ADB) has trimmed its 2015 and 2016 growth forecasts for the Republic while it maintained its outlook for most of the region, saying that the ­local manufacturing sector is ­dragging down economic growth here.

A man looks at a cluster of factories at an industrial park in Singapore in this September 16, 2014 file photo. Photo: Reuters

A man looks at a cluster of factories at an industrial park in Singapore in this September 16, 2014 file photo. Photo: Reuters

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SINGAPORE — The Asian Development Bank (ADB) has trimmed its 2015 and 2016 growth forecasts for the Republic while it maintained its outlook for most of the region, saying that the ­local manufacturing sector is ­dragging down economic growth here.

Singapore’s economy is now ­expected to grow 2 per cent in 2015, marginally lower than the previously expected 2.1 per cent, the ADB said in its outlook update released today (Dec 3). It also lowered its forecast for Singapore next year, to 2.3 per cent from 2.5 per cent.

“Manufacturing was largely to blame for the sluggish growth, as it contracted steeply … in the third quarter, with output declines for electronics, biomedical manufacturing, and transport engineering,” said the ADB in its report.

Ministry of Trade and Industry ­(MTI) data last week showed that the manufacturing sector contracted 6.2 per cent in the third quarter from a year earlier, extending from the 4.8 per cent decline in April-June.

The ADB added that growth in Singapore’s construction and services sector also moderated, which added to the overall weaker outlook.

In its report last week, the MTI ­also said that it expects the Singapore economy to grow by “close to 2 per cent” this year, the lower end of its earlier forecast for an expansion of between 2 and 2.5 per cent. Growth could come in at between 1 and 3 per cent next year, it added.

CIMB Private Banking economist Song Seng Wun said: “There’s a chance that manufacturing may come out of the recession in the second half of next year when export demand is expected to strengthen against a broad-based recovery in the US and better prospects in Europe.”

Meanwhile, the ADB maintained its growth projections for developing Asia at 5.8 per cent in 2015 and 6 per cent in 2016, a testament to the ­region’s resilience to continued weakness in advanced economies. China’s growth forecast for 2015 was raised slightly to 6.9 per cent from 6.8 per cent.

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