Singapore economy expands 2.1%, faster than earlier estimated

SINGAPORE: Singapore’s economy expanded at a faster pace in the third quarter than earlier estimated, with the city-state projecting the recovery will take hold next year.

The final reading of gross domestic product showed the economy grew an annualised 2.1% in the third quarter from the previous three months, versus a previous projection of 0.6%, the Ministry of Trade & Industry said in a report today.

The economy is set to expand 0.5%-2.5% next year, compared with 0.5%-1% this year, it said.

Compared with a year ago, GDP rose 0.5% in the third quarter, up from an initial estimate of 0.1%.

The median forecast in a Bloomberg survey was for growth of 0.4%.

“Given the growth outlook for Singapore’s key final demand markets, and the projected recovery in the global electronics cycle in the year ahead, MTI expects growth in the Singapore economy to pick up modestly in 2020 as compared to 2019,” the ministry said.

With no clarity about whether US-China trade tensions will be resolved soon, Singapore’s trade-reliant economy is showing mixed signs, with the electronics industry experiencing a tentative rebound and exports still contracting.

In a separate report today, Enterprise Singapore sees non-oil export growth of 0%-2% in 2020, compared with a contraction of 9.5% to 10% this year.

“Prospects for 2020 tilt toward stabilisation,” said Selena Ling, an economist at Oversea-Chinese Banking Corp in Singapore.

OCBC sees growth of 1%-2% in 2020, with non-oil exports likely to recover “if there is no further escalation of US-China trade tensions in the form of fresh tariffs/hikes,” she said.

Singapore’s currency was little changed at 1.3626 per dollar in early Asian trading today.

The central bank, which eased monetary policy for the first time since 2016, said last month it expects a turnaround in the economy toward year’s end, with a modest improvement next year alongside stable global prospects.

Edward Robinson, chief economist of the Monetary Authority of Singapore, told reporters policy is “assessed to remain appropriate at this point in time” and the “policy stance then will depend on how the economy evolves.”

The MTI said there were “signs of stabilisation in the global economy even though global growth remains weak.”

World growth is projected to see a “modest pickup” in 2020 led by emerging markets, while growth in Singapore’s main markets of the US and China will likely ease, it said.

Manufacturing rebounded from a recession to grow an annualized 7.6% in the third quarter from the previous three months. Services rose 0.4%, while construction contracted 0.1%.