SINGAPORE (Nikkei Markets) -- Economists are holding to their growth forecasts for Singapore this year although growing trade tensions and tighter monetary policy remain major concerns, the central bank's latest survey showed.
The median forecast of 24 private sector economists polled by the Monetary Authority of Singapore is for gross domestic product to grow 3.2% this year, unchanged from the previous survey. Growth next year is expected to ease to 2.8%.
Expectations of growth in services, especially finance and insurance, were robust, underlining a trend that has supported the domestic economy even as momentum in manufacturing has slowed.
The most cited potential positive driver in the June survey was the property market, which was mentioned by 47% of respondents, up from 41% in March.
Singapore's property market has rebounded strongly in recent months. In the first quarter, the private residential property price index climbed 3.9% from the fourth quarter, according to data from the Urban Redevelopment Authority.
Fears about an economic slowdown in China also eased, with only 21% citing it as a major downside risk in the June survey, compared with 53% in March.
"Instead, tightening monetary policy across the developed world, in particular by the U.S. Federal Reserve, has led to increasing concerns over rising interest rates," the survey said.
The Fed is widely expected to increase rates by 25 basis points when its meeting ends later Wednesday. Some expect two more hikes this year, others just one.
Of the respondents polled, 47% cited higher rates as a risk, up from just 17% in the March survey.
More economists also considered the tit-for-tat on tariffs between the U.S. and its major trading partners as a significant threat to growth - the proportion saying so edged up to 88% from 84% in the previous survey.
Singapore's trade-dependent economy has flourished in recent quarters thanks to booming demand for electronics that has benefited the city-state's manufacturers.
Although recent indicators suggest the technology cycle may be waning, the trickle-down effect is helping other areas such as services to grow.
GDP grew 4.4% in the first quarter, beating the 3.8% forecast in the MAS's March survey.
The government recently revised up the lower end of its forecast range for growth this year to 2.5-3.5% from 1.5-3.5% previously.
The latest survey, which tips second-quarter growth at 3.9%, found that economists believe the performance of Singapore's key electronics sector could still surprise on the upside. However, the portion of respondents expecting that outcome fell to 37% from 47% in the March survey.
As for finance and insurance, economists expect it to grow 7%, up from 4.4% in the previous survey. Construction, meanwhile, is expected to shrink, a reversal from the findings in the March poll.