Singapore final Q4 GDP seen revised down on slowing manufacturing, exports growth

13-Feb-2018 Intellasia | Reuters | 6:00 AM Print This Post

Singapore’s economy is forecast to have expanded less than initially expected in the fourth quarter as factory activity and exports slowed, suggesting the recent moderation in booming sales of electronics could be a drag on growth this year.

A Reuters poll on Monday predicted quarter-on-quarter growth at 2.0 percent in the October-December period on a seasonally adjusted and annualised basis, slowing from the 2.8 percent preliminary figure.

“Both industrial production and NODX (non-oil exports) contracted over the last quarter likely leading to a sequential contraction in overall growth,” said ANZ bank economists in a research note to its clients.

Still, improvement in domestic demand likely helped support the economy, economists said.

The expected slowdown in fourth quarter GDP growth contrasts with a stellar third quarter when the city state’s economy grew at its quickest pace in nearly four years.

Growth in July-September period came in at 5.4 percent from a year earlier and 9.4 percent from the prior quarter on an annualised and seasonally adjusted basis.


Manufacturing and exports of electronics, Singapore’s main driver of growth in the past year are starting to moderate, analysts say.

In December, Singapore factories posted their biggest on-year output decline in two years, driven by a slump in production while growth in the city-state’s hot electronics manufacturing slowed.

In the same month exports growth cooled more than expected, pressured by a decline in electronics sales trade and the first drop in shipments to China in more than a year.

The exports boom has benefited Singapore and other trade-dependent Asian economies in the past year, particularly for makers of electronics products and components such as semiconductors.

At its last semi-annual policy meeting in October, the central bank held monetary policy steady but changed a reference to maintaining current settings for an extended period, a shift that analysts said created room for a tightening this year.

Singapore will announce its 2018 budget next week, with economists expecting a higher goods and services tax to support future social spending.


Category: Singapore

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