Singapore: Growth rebounds in third quarter on strong manufacturing output
October 14, 2011
According to advance estimates released on 14 October by the Ministry of Trade and Industry (MTI), GDP expanded 5.9% over the same period last year. The reading came in well above the previous quarter's 1.0% increase and beat market expectations, which had the economy advancing 5.7%. Compared to the previous quarter, the economy grew 1.3% on a seasonally adjusted annualised rate (saar), which contrasted the previous quarter 6.3% contraction. The improvement was entirely driven by a rebound in the manufacturing sector, which swung from a 5.8% contraction in the second quarter to a 13.2% increase in the third. According to the MTI, the volatile biomedical manufacturing sector was the key driver behind the rebound. In contrast, the construction and services sectors moderated the pace, increasing 0.4% (Q2: +1.5% year-on-year) and 3.6% (Q2: +4.0% yoy) respectively. Although the MTI remains confident that the biomedical manufacturing cluster will support medium-term growth, production shifts in the highly volatile pharmaceutical sector, coupled with the global economic slowdown, are likely to weigh on growth in the quarters ahead. The government adjusted its growth projection for this year to 5.0%, the lower end of its previous projection of between 5.0% and 6.0%. The Monetary Authority of Singapore, however, stated that the economy may expand by less than 3.0% percent next year, amid subdued global growth.