Credit Suisse raised its economic growth forecast for Singapore this year to 3.3 percent from 3.0 percent previously.
It also raised its private consumption growth forecast to 3.6 percent on-year for 2018, from 2.9 percent previously.
“Goods-and-services tax (GST) delay and cash handouts [are] positive for gross domestic product (GDP) and private consumption,” it said in a note dated Monday.
The bank said it had built in a 2 percentage-point increase in the GST as a base case assumption, but the government surprised by delaying the increase to 2021 or later.
The second surprise behind the bank’s forecasts changes was the one-off income-based cash handout of S$100-S$300 for Singaporeans age 21 and older, for a total cost of S$700 million, Credit Suisse said. It noted the exact timing of the payouts wasn’t yet certain.