Singapore's GDP to reflect global slowing.

There does not appear to be a sound consensus on what will happen with the Singaporean economy in 2007. Almost all the forecasts reviewed do agree that the Southeast Asian country will post a slight slowing of exports-as to be expected, the country is heavily dependent on trade-and the construction sector is obviously set to improve.

Beyond that, there is little agreement on anything else. The growth of GDP is an example.

The International Monetary Fund's (IMF) September 2006 estimate of 2007 Singaporean growth is 4.5 percent. This follows an estimated 2006 performance in GDP growth of 6.9 percent.

One of Singapore's well informed neighbors, Japan, estimates that Singapore's 2007 GDP will grow 6.1 percent. Specifically, the estimate is from the Japan External Trade Organization's (JETRO) Institute of Developing Economies.

JETRO believes that Singapore will slow because of the export situation mentioned above and because, "Domestic demand, which increased by a large margin in 2006, is forecast to slow gently."

"The Singapore economy continued to grow at a healthy pace." This quote is from an Agence France-Press (AFP) story distributed on January 3, 2007 in which the AFP cites Singapore's Ministry of Trade and Industry (MTI) as its source.

The Singaporean government, in a revised growth estimate for 2007, said the 2007 economy would advance between 4.0 percent and 6.0 percent.

The AFP story quoted three local economists on growth expectations. A bank economist said that GDP would increase 5.5 percent. An economist with a local brokerage said he thought GDP would increase 5.7 percent. Another bank group said growth would be 5.2 percent.

For anyone wanting to have a moderately accurate idea of what will happen in Singapore in 2007, this broad spread of predictions is not very helpful.

But there are two elements to consider. Because, as mentioned above, Singapore is so heavily dependent on exports, the GDP figures are mostly affected by the export sector. Consumer demand is more stable, and, while not as important to overall GDP as exports, consumer spending is likely to be relatively stable-and that means growth in the consumer segment will continue at a comfortable pace.

The second element to consider is that year end quarterly GDP figures, along with the quarterly trend numbers, give a better idea of what might happen in 2007. On January 3, 2007, the International Herald Tribune (Neuilly) reported final quarter 2007 GDP growth in Singapore at 5.9 percent (year-on-year) and total growth for 2006 at 7.7 percent. Taking into consideration the global economy is expected to slow in 2007, Singapore GDP growth should fall into the 5.8 percent to 6.1 percent range.

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