Singapore economic growth forecast raised by Credit Suisse after budget

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.