By Ambar Warrick

Investing.com-- The outlook for Singapore’s economy worsened amid headwinds from rising commodity prices and a slowdown in China, a survey by the Monetary Authority showed on Thursday.

In the results of a survey conducted over the past three weeks, the Monetary Authority of Singapore (MAS) found that respondents expect the economy to grow by 3.5% in 2022, down from previous expectations of 3.8%.

The figure is still in line with the MAS' expectations for GDP of between 3% and 4% in 2022, with weaker growth forecast in 2023. Respondents to the survey also expected growth to slow to 2.8% in 2023.

The survey showed that slowing growth in the finance and construction sectors is expected to weigh on the GDP the most. The city-state’s key manufacturing sector is expected to grow more than previously expected.

Respondents also expect inflation to rise more than previously expected. Singapore’s consumer price index is expected to end the year at 5.7%, up from the previous survey’s 5%. Core inflation is also expected at 3.8%, compared with previous expectations of 3.4%. The MAS is also expected to keep tightening monetary policy for the remainder of the year, according to the survey.

Singapore inflation is currently running at a 14-year high due to pressure from rising fuel and food costs. This comes on the back of surging oil prices earlier in the year, which boosted the country’s large fuel bill.

The MAS expects annual consumer price inflation to come between 5% and 6% in 2022, while core inflation is expected between 3% and 4%.

An economic slowdown in China, Singapore’s largest trading partner, has greatly weighed on the island-state’s economy. China is struggling with slowing growth due to its strict zero-COVID policy, as well as a brewing energy crunch due to droughts in some provinces.

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