Singapore: Economy rebounds strongly in the final quarter of 2016
February 17, 2017
According to revised data released by the Ministry of Trade and Industry on 17 February, Singapore’s economy expanded a strong 12.3% in Q4 from the previous quarter at a seasonally adjusted annualized rate (SAAR) (previously reported: +9.1% quarter-on-quarter), contrasting Q3’s revised 0.4% drop (previously reported: -1.9% quarter-on-quarter) and marking the best result since Q1 2011. In year-on-year terms, GDP expanded 2.9% in Q4 (previously reported +1.8% year-on-year), which was a substantial acceleration from Q3’s 1.2%. The final quarter’s positive result brought full-year 2016 GDP growth to 2.0% (previously reported: +1.8%), matching 2015’s reading.
The rebound came on the back of a broad-based improvement in the economy, with the manufacturing sector growing the most. Manufacturing expanded an impressive 39.8% qoq SAAR, contrasting Q3’s 5.0% fall, with the electronics and biomedical manufacturing clusters leading the recovery. The rebound in manufacturing was underpinned by improving external demand and was reflected in the positive PMI readings in the final months of last year. Similarly, the services sector expanded 8.4%, the fastest rate in two years, accelerating from Q3’s 1.1% growth. The transportation and storage and the finance and insurance sectors drove the improvement, expanding at double-digit rates; they likely benefitted from the recovery of exports. Conversely, the construction sector remained weak, although it did swing from a sharp contraction in Q3 to growth. The ongoing weakness in the property market, with house prices continuing to decline, is still negatively affecting the sector.