Singapore: Economic growth contracts in Q3
October 14, 2013
In the third quarter, GDP contracted 1.0% over the second quarter at a Seasonally Adjusted Annualized Rate (SAAR) according to an advance estimate released by the Ministry of Trade and Industry (MTI) on 14 October. The figure was above market expectations of a 4.0% decrease; however, it significantly contrasted the revised 16.9% expansion recorded in Q2 (previously reported: +15.2% quarter-on-quarter SAAR). On the other hand, GDP expanded 5.1% (Q2: +3.8% year-on-year) compared to the same period last year.
The contraction in the third quarter came on the back of a strong fall in manufacturing industries, which swung from a 33.5% annualized expansion in the second quarter to a 3.4% contraction in the third quarter. In addition, construction output fell 8.8% over the previous quarter (Q2: +20.9% qoq SAAR) while services added just 1.0% (Q1: +12.3% qoq SAAR).
The Monetary Authority of Singapore expects GDP to grow between 2.5% and 3.5% in both 2013 and 2014. FocusEconomics Consensus Forecast panelists project that the economy will increase 2.4% in 2013, which is unchanged from last month's forecast. For 2014, the panel expects growth to accelerate to 3.9%, which is up 0.1 percentage points from last month's estimate.
Author: Dirina Mançellari, Senior Economist