Singapore: Growth moderates less than previously estimated in Q3
November 18, 2010
According to revised figures released by the Ministry of Trade and Industry (MTI) on 18 November, gross domestic product (GDP) expanded 10.6% over the same quarter last year, which was slightly above the 10.3% expansion first reported on 14 October. The figure represents a marked deceleration compared to the 19.5% expansion recorded in the second quarter. In seasonally adjusted annualised terms, the reading is equivalent to an 18.7% contraction over the previous quarter (Q2: +27.3% saar). The third quarter slowdown mainly reflected a deterioration in domestic demand. Private consumption decelerated from a 7.3% rise in the second quarter to a 5.2% expansion in the third. In contrast, investment rebounded from a 1.4% contraction in Q2 to a 5.6% increase in Q3, driven by private investments. Exports of goods and services rose 20.4% (Q2: +23.8% yoy) and imports expanded 17.4%, down from a 21.5% rise in the second quarter. In addition, third quarter growth was negatively affected by a destocking process, as the contribution from inventories to overall economic growth was minus 1.3 percentage points. On a sector breakdown, the upward adjustment mainly reflected a softer deceleration in the manufacturing sector than previously estimated. Manufacturing output deteriorated from a 46.1% yoy expansion in Q2 to a 14.3% rise in Q3 (previously reported: +12.1% yoy). Meanwhile, the all-important services sector ? which accounts for two thirds of GDP ? decelerated less markedly, posting a 10.1% increase in the third quarter (Q2: +11.7% yoy). Given the upward revision, the government raised its official forecast for 2010 GDP growth to 15.0%, from a 13.0% ? 15.0% range previously reported. If attained, the figure would represent the fastest rate of expansion in more than two decades. For 2011, the MTI expects the economy to grow between 4.0% and 6.0%.