GDP growth records quickest expansion in two years in Q3

GDP growth beats market expectations: Growth gained traction in the third quarter, with GDP expanding 7.4% on an annual basis (Q2: +7.1% yoy). This marked the fastest increase since Q3 2022 and exceeded market expectations.

Industry and services accelerate, but agriculture slows: The industrial sector fueled the Q3 improvement by expanding 9.1% annually (Q2: +8.6% yoy), marking the quickest growth since Q3 2022. The services sector also gained steam, growing 7.5% in Q3 (Q2: +7.1% yoy), likely buoyed by strong external demand. That said, agricultural sector growth slowed to 2.6% in Q3 amid the impact of Typhoon Yagi, which made landfall in early September, marking the worst result since Q3 2021 (Q2: +3.6% yoy).

GDP growth to accelerate further in 2025: Our panelists expect GDP growth to decelerate from Q3 in the Q4 due to lingering disruption arising from Typhoon Yagi. For 2024 as a whole, economic growth is forecast to accelerate from last year and expand at an even faster pace in 2025.

Panelist insight: Commenting on the release, Suan Teck Kin, economist at United Overseas Bank, stated: “For the full year 2024, GDP growth rate will be lifted by the cumulative YTD performance which has already reached 6.8% y/y. We thus revise up full year forecast to 6.4% (vs previously lowered projection of 5.9%), which is close to the upper end of official growth target of 6.0-6.5%. Growth forecast for 2025 is maintained at 6.6%, to reflect an expected ramp up in output early next year to compensate for the earlier losses as a result of Typhoon Yagi, as well as spillover effects from US Fed’s policy easing and China’s stimulus measures.”

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