BMI View: We see quite a few reasons to be optimistic about Singapore's freight industry and its tradeperformance over the medium term forecast period to 2021. The improvement in the global tradeenvironment and strong demand from the electronics sector is likely to be the main driver of growth inSingapore over the short term. China's Belt and Road initiative provides plenty of upside risk to our freightforecasts going forward and in September, a Memorandum of Understanding was signed by both theSingapore International Mediation Centre and the Mediation Center of the China Council for thePromotion of International Trade / China Chamber of International Commerce to resolve any potentialdisputes that may arise under the initiative.
Key Updates And Forecasts
Singapore's economy grew by 2.5% y-o-y in Q2 2017 at the same rate as in Q1 2017 and we areupgrading our 2017 and 2018 real GDP growth forecasts to 2.2% and 2.5% respectively, from 1.9% and2.2% previously - welcome news for the freight industry and, in particular the consumer-facing modes,namely road, shipping and air. The improvement in the global trade environment and strong demand fromthe electronics sector is likely to be the main driver of growth. Domestically, while the government'ssupport to the construction sector will be positive, excessive strength will be capped by the ongoinglabour restructuring process.
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