Singapore upgrades growth outlooks
Economy expects to grow up to 4 per cent this year on strength in manufacturing and services
Singapore raised its full-year growth forecast for this year on Thursday to between 3.5 and 4 per cent as third-quarter gross domestic product exceeded prior estimates, helped by further signs of a recovery in manufacturing and continued strength in services.
The government now expects the economy to grow by as much as 4 per cent this year, better than the earlier forecast of 2.5 to 3.5 per cent and last year’s 1.3 per cent.
“Externally oriented sectors such as manufacturing, wholesale trade, and transportation and storage are likely to support growth, in line with a slight pick-up in the global economy,” the Ministry of Trade and Industry said in a statement.
The upgrade means the economy will have stronger momentum going into next year, although the medium-term outlook will depend on the pace of global growth.
The ministry said next year’s growth will likely be between 2 per cent and 4 per cent, supported by a slow recovery in the United States and euro zone.
Manufacturing has risen way ahead of exports and so, as exports demand catches up, there might be some softness or sluggishness in manufacturing
Singapore revised its trade forecasts lower, with total trade now expected to grow 1-2 per cent this year, with non-oil domestic exports contracting 4-5 per cent.
“A lot of the manufacturing growth in Singapore this year has been front-loaded already,” Barclays economist Joey Chew said.
“Manufacturing has risen way ahead of exports and so, as exports demand catches up, there might be some softness or sluggishness in manufacturing,” she said.
Singapore said its GDP grew 5.7 per cent in the third quarter from a year ago, more than the advance estimate of 5.1 per cent last month and the median estimate of economists polled by Reuters.
The expansion was led by financial services, which grew 10.5 per cent during the quarter from a year ago.
Manufacturing grew 5.5 per cent from a year earlier, improving from 1.3 per cent in the second quarter, helped by a rebound in the transport engineering cluster, which includes oil rigs and aircraft parts.
On an annualised and seasonally adjusted rate, GDP rose 1.3 per cent in the third quarter from the preceding three months, slower than the blistering 17.4 per cent achieved in the second quarter.
Still, the quarter-on-quarter figure was better than the advance estimate of a 1 per cent contraction.
