Singapore: Economy deteriorates in Q3
November 24, 2016
According to a new estimate released by the Ministry of Trade and Industry on 24 November, the economy contracted a revised 2.0% in Q3 over the previous quarter at a seasonally adjusted annualized rate (previously reported: -4.1% quarter-on-quarter SAAR). The reading represented the worst reading since Q3 2012 and was a poorer performance than the revised 0.1% rise recorded in Q2 (previously reported: +0.2% qoq SAAR), but overshot market expectations of a sharper 2.5% fall.
The overall result came on the back of a broad-based deterioration of the economy, which is struggling to overcome the weak external environment. The manufacturing sector swung from the mild 2.1% expansion recorded in Q2 to a sharp 9.1% contraction in Q3. The important services sector dropped 1.3% in the third quarter, which marked a deterioration compared to Q2’s softer 0.9% contraction. The result recorded in the services sector was strongly influenced by the particularly bad performance of the transport and storage subsector, which swung from a robust expansion in Q2 to a sharp contraction in Q3, as well as by the contraction in the wholesale and retail subsector; on the upside, within the services sector the subsector of hotels and restaurants swung from contraction in Q2 to a robust expansion in Q3, and the fall in the financial services subsector softened. Lastly, the construction sector contracted 0.8% in Q3, slightly up from the 1.2% drop recorded in Q2.
In year-on-year terms, GDP expanded a revised 1.1% in Q3 (previously reported: +0.6% year-on-year), which came in below the 2.0% growth recorded in Q2 and represented an over seven-year low.