Singapore: Economic growth picks up but remains muted in Q4
January 2, 2020
The Singaporean economy continued to grow at a subdued rate in the final quarter of last year, with year-on-year growth coming in at 0.8% according to an advanced estimate. The result was up marginally from Q3’s revised 0.7% expansion (previously reported: +0.6% year-on-year). Meanwhile, on a quarter-on-quarter seasonally-adjusted annualized (SAAR) basis, the economy expanded a meager 0.1% (Q3: +2.4% SAAR). Over 2019 as a whole, the economy grew a mere 0.7%, down sharply from 2018’s 3.1% expansion.
Annual growth continued to be hamstrung by a weakened manufacturing sector that remained under pressure from the global tech slump and lingering trade tensions between the world’s two largest economies; the sector contracted 2.1% year-on-year in Q4 (Q3: -0.9% yoy), weighed down by declines in electronics, chemicals and transport-related goods. This largely offset robust activity in the construction sector (Q4: +2.1% yoy; Q3: +2.4% yoy), owing to public-sector construction outlays. Meanwhile, activity in the service sector picked up (Q4: +1.4% yoy; Q3: +0.9% yoy), partly due to solid growth in the finance and insurance sector.
This year, economic growth is seen accelerating from 2019’s weak showing, on stronger exports and investment, and the government’s fiscal measures. However, the economic outlook will remain clouded by lingering external headwinds and uncertainty over U.S.-China trade negotiations, which could weigh on the trade-dependent economy.
Author: Jan Lammersen, Economist