Singapore economy expands 2.2% in Q3

Singapore economy expands 2.2% in Q3

The Singapore economy grew by 2.2 per cent in the third quarter from a year ago, slower than the 4.1 per cent growth in the previous quarter, according to data from the Ministry of Trade and Industry (MTI) on Thursday (Nov 22). Eugenia Lim with more.

SINGAPORE: The Singapore economy grew by 2.2 per cent in the third quarter from a year ago, slower than the 4.1 per cent growth in the previous quarter, according to data from the Ministry of Trade and Industry (MTI) on Thursday (Nov 22). 

This is also a slightly downward revision from the Government's gross domestic product (GDP) advance estimate of 2.6 per cent released last month.

On a quarter-on-quarter seasonally-adjusted annualised basis, GDP growth expanded 3 per cent, picking up from the second quarter's 1 per cent.

A Reuters poll comprising 11 analysts had predicted a higher 4.2 per cent rise quarter-on-quarter and a 2.4 per cent rise on a year-on-year basis.

Growth was mainly supported by the finance and insurance, manufacturing and business services sectors, MTI said. 

The MTI also revised its forecast for GDP growth for 2018 to 3 to 3.5 per cent, from 2.5 to 3.5 per cent previously. It gave a wide range for 2019's GDP growth forecast of between 1.5 to 3.5 per cent.

"The external demand outlook for the Singapore economy in 2019 is slightly weaker as compared to 2018. At the same time, risks in the global economy are tilted to the downside," MTI said.

"There is the risk of a further escalation of the ongoing trade conflicts between the US and its key trading partners, which could trigger a sharp fall in global business and consumer confidence."

"REMAINS IN LINE" WITH Q3 GDP FIGURES ACROSS REGION

The downward revision of Q3 growth comes mainly from weaker growth in the manufacturing and services sectors, analysts said on Thursday.

Slower services growth can be attributed to external-oriented services such as trade, transportation and storage and finance and insurance clocking in slower growth, said UOB senior economist Alvin Liew. 

However, Thursday's result "remains in line" with the latest round of weaker than expected Q3 GDP figures for other Asian countries across the region, he added.

Nevertheless, UOB is maintaining a growth forecast for Singapore of 3.4 per cent for 2018, implying an uptick in Q4 growth, he said. 

"The slight uptick in Q4 growth is largely due to a favourable base effect even as we continue to expect growth moderation going into 2019."

The quarter-on-quarter expansion underscores "some degree of resilience in the economy", said DBS senior economist Irvin Seah.

"That said, there are concerns regarding the risk aversion and faster than expected hikes in interest rates causing excessive volatilities in the financial markets, and property cooling measures weighing down on the business service (ie real estate) and construction sectors in the coming quarters," he said.

Growth momentum is likely to ease, with a slowdown in growth pace likely to persist into 2019, he added.

Source: CNA/Reuters/na(mn)

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