Singapore skyline

Singapore GDP Q4 2017

Singapore: Economic growth decelerates in Q4, broadly in line with market expectations

Economic growth decelerated in Q4, weighed down by a contraction in the manufacturing sector, according to an advance estimate released by the Ministry of Trade and Industry on 2 January, which is based largely on data from the first two months of the quarter. GDP grew 2.8% quarter-on-quarter in Q4 at a seasonally-adjusted annualized rate (SAAR), down sharply from Q3’s 9.4% jump. The result was broadly in line with market expectations of 2.9% qoq SAAR growth.

The deceleration was led by a weak quarter for the volatile manufacturing sector. Manufacturing contracted 11.5% qoq SAAR, strongly contrasting Q3’s 38.0% surge. On the other hand, the services sector, which accounts for about two-thirds of the economy, expanded a strong 7.5% qoq SAAR in the fourth quarter of the year, more than doubling the previous quarter’s 3.4% growth. Lastly, the contraction in the construction sector eased from 5.5% in Q3 to 3.6% in Q4.

In year-on-year terms, GDP expanded 3.1% in Q4, losing steam from Q3 (+5.4% year-on-year). Growth came on the back of a 6.2% expansion in the manufacturing sector (Q3: +19.2% yoy), led by growth in the electronics and precision engineering clusters, which more than offset a contraction in the biomedical manufacturing and transport engineering clusters. The expansion in manufacturing benefited from solid global demand for electronics. This was reflected in strong figures for both industrial production and exports in the first two months of Q4. Growth in the service sector remained solid, coming in at 3.0% in Q4 (Q3: +3.2% yoy). Robust external demand also supported the sector.

On the downside, the construction sector shrank for a fourth consecutive quarter in Q4, by 8.5% in annual terms, a further deterioration from Q3’s 7.7% decline. The unwinding of the large real estate stock continued to weigh on construction activity in the private sector.

GDP data continued to show the picture of a split economy, in which export-oriented sectors benefited from solid global trade, albeit to a lesser extent than in the previous quarter, and the ongoing correction in the construction sector again restrained growth. Momentum will likely moderate in 2018 due to cooling demand from China and weak construction activity. However, fixed investment should to a certain degree rebound in 2018, helped by government measures to support businesses and investment, as well as by increased infrastructure spending. Overall, Singapore’s solid fiscal and external positions, low tax burden and competent governance guarantee strong fundamentals and provide the necessary flexibility to adapt to a rapidly changing economic environment.

Singapore GDP Forecast

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest