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Singapore Country Risk Report Q4 2018

Singapore Country Risk Report Q4 2018

Singapore's fourth generation leaders are showing signs of taking on a greater leadership role, boding well for the city-state's ongoing leadership succession process. We believe that the next generation is likely to face more challenges than their predecessors amid a more vocal opposition. However, Singapore's overall political outlook is likely to remain stable as the third generation leaders are unlikely to fade from the political scene.

We continue to expect Singapore's economic growth to cool over the coming quarters as the economy will continue to face headwinds from the ongoing global trade conflict, a weak construction sector, and rising interest rates.

We expect Singapore's healthy fiscal position to remain intact over the coming years, which will underpin the city-state's favourable business environment. The government is fiscally prudent and is already planning ahead to raise GST revenues over the coming years in a bid to cope with rising expenditures amid structural shifts such as an ageing population.

We expect the Monetary Authority of Singapore (MAS) to adopt a wait-and-see approach over the coming months, given that the Singapore economy continues to face mounting external uncertainty while inflationary pressures remain muted. Therefore, we believe that the central bank will keep its existing policy stance on hold during its upcoming biannual monetary policy meeting in October 2018.

The Singapore dollar's trend is correcting towards further weakness, while rising uncertainty in the global trade environment will put downside pressure on the Singapore dollar over the near-term, despite the MAS's appreciatory stance on the currency.Major Forecast Changes

We have revised our 2018 real GDP growth forecast to 3.3% (from 3.0% previously) to reflect the outperformance in H118.

We have revised our 2018 average forecast for the Singapore dollar to SGD1.36/USD (from SGD1.30/USD previously) to reflect greater headwinds to the cur-rency.

Key Risks



Despite Singapore's sound fundamentals, the confluence of weak external demand (led by a rapidly slowing Chinese economy) and domestic economic restruc-turing could give rise to a technical recession over the coming quarters.


Executive Summary
Core Views
Major Forecast Changes
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Singapore's Economic Deceleration To Continue As Global Trade Risks Rise
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
TABLE: TOP FIVE GOODS EXPORTS
TABLE: TOP FIVE GOODS IMPORTS
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
Monetary Policy
Monetary Authority Of Singapore To Stay On Hold Amid Global Trade Uncertainty
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Fiscal Policy And Public Debt Outlook
Singapore's Healthy Fiscal Position To Remain A Key Strength
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE SOURCES
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Singapore Country Risk Q4 2018ContentsCurrency Forecast
Revising Singapore Dollar Weaker As External Risks Grow
TABLE: CURRENCY FORECAST
10-Year Forecast
The Singaporean Economy To 2027
Solid Growth Trajectory To 2027
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Singapore-Malaysia Relations To Be Cooler Over The Coming Years
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Political Liberalisation Likely To Be Slow Over Next Decade
Global Macro Outlook
Fewer Negative Surprises, But Trade Risks Rising
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: SINGAPORE – MACROECONOMIC DATA AND FORECASTS

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