Singapore’s 2016 economic growth forecast lowered, labor demand and wage hikes to moderate

In 2016, the Singaporean economy is likely to expand 1.9%, according to the median projection of analysts in the quarterly survey conducted by the Monetary Authority of Singapore. In the earlier survey, the analysts projected the economy to expand 2.2%. This compares with Ministry of Trade and Industry’s official GDP forecast of 1% to 3% growth.

In 2016, manufacturing is likely to contract 2.7%, as compared with the earlier forecast of 1.2%. The market is also not positive about the insurance and finance sector. The sector is expected to expand 3.6% this year, as compared with the earlier forecast of 5.9%. However, analysts are more positive about the construction sector, which is forecast to expand 2.6% in 2016, as compared with the earlier projection of 1.2%.

Meanwhile, the Ministry of Manpower (MOM) forecasts labor demand and wage hikes to moderate in 2016 with job growth at only a fraction of the last two years’ and layoffs highest since 2009 recession. The Ministry said in a statement that it is keeping a close watch on the current economy and labor market situation and is bolstering employment support to help displaced locals be employed again. According to the Ministry’s Labor Market 2015 report, the unemployment rate remained low at 1.9% in 2015 and that the number of job openings exceeded job seekers.