Singapore: Growth in the third quarter revised up
November 21, 2011
In the third quarter, GDP expanded 6.1% over the same period last year, according to revised estimates released on 21 November. The reading was slightly above the advance estimate of 5.9% growth reported on 14 October. In the previous quarter, the economy had grown a paltry 1.0%. Compared to the previous quarter, the economy grew a seasonally adjusted annualised 1.9% (previously reported: +1.3% quarter-on-quarter saar), which contrasted the 6.4% contraction seen in the second quarter. Private consumption grew 7.1% year-on-year, which came in above the 5.9% expansion observed in the second quarter. In contrast, government spending slowed to a 2.3% increase (Q2: +5.7% yoy). In addition, fixed investment moderated the pace by growing 6.3%, down from the robust 9.5% expansion tallied in the second quarter. The external sector deteriorated markedly, as exports swung from a 1.9% increase in the second quarter to a 0.3% contraction in the third quarter. Imports also slowed, but remained in positive territory, moderating from a 3.0% expansion in the second quarter to a 1.2% increase. As a result, the contribution from the external sector to overall growth decreased further from minus 1.5 percentage points in the second quarter to minus 3.0 percentage points in the third quarter. At the sector level, the rebound was entirely driven by the manufacturing sector, which swung from a 5.6% contraction in the second quarter to a 14.2% increase in the third quarter. In contrast, construction and services moderated the pace over the previous quarter by growing 0.3% (Q2: +1.5% yoy) and 3.7% (Q2: +4.0% yoy) respectively. In that vein, the Ministry of Trade and Industry stated that, ?externally-oriented sectors such as electronics and wholesale trade will continue to perform poorly, while the financial services sector will be affected by heightened uncertainties in the external environment. Nevertheless, there will be some modest support to growth from the biomedical manufacturing cluster and tourism-related sector.? The government expects the economy to grow 5.0% this year and between 1.0% and 3.0% next year.