Singapore Q3 GDP Growth Seen Revised up on Exports Boon

Singapore is hoping to deploy autonomous buses on public roads in three different districts of the city-state from 2022 to provide better connectivity, the country's Ministry of Transportation said in a statement on Wednesday (22/11). (Reuters Photo/Thomas White)

By : Fathin Ungku | on 5:00 PM November 18, 2017
Category : International, SE Asia

Singapore. Singapore's economy is forecast to have expanded at a faster pace than initially estimated in the third quarter, as an upturn in global demand boosted exports, particularly in the city state's key tech sector.

A Reuters poll on Friday (17/11) predicted quarter-on-quarter growth in Singapore at 7.4 percent in July-September, on a seasonally adjusted and annualized basis, the fastest pace since the fourth quarter of 2016.

That would easily top preliminary figures showing the trade-dependent economy grew at a faster-than-expected pace of 6.3 percent.

Year-on-year, third quarter final gross domestic product (GDP) was forecast to show growth of 5.0 percent, according to the poll's median estimate of 11 economists, an improvement from the 2.9 percent growth for April-June.

The data will be released on Thursday, November 23.

"Growth prospects are getting brighter for the Singapore economy after two years of sub-par performance," analysts at ANZ bank said in a research note to clients.

Recent data pointed to a more broad based recovery for the city-state, dispelling previous worries that Singapore was too dependent on its tech products.

Earlier on Friday, Singapore reported that its exports rose the most in 2-1/2 years in October, thanks to growth in both its electronics and non-electronics exports.

"The composition of growth (in 2018) is going to be more balanced," compared to that so far this year, said Credit Suisse economist, Michael Wan.

Singapore and other trade-dependent Asian economies enjoyed a strong tailwind from improved global demand in the past year, particularly for electronics products and components such as semiconductors.

"This year was more about exports, but as we move to 2018, you would see more support from things like retail sales and private consumption," Wan said.

The positive growth and inflationary impulse from the trade sector has raised the prospect of tighter monetary policy next year.

The Monetary Authority of Singapore held policy steady last month but changed a reference to maintaining current settings for an extended period, a shift that analysts said created room for a tightening next year.

"We expect the Monetary Authority of Singapore (MAS) to exit from their neutral policy stance at their October 2018 meeting," ANZ analysts said.


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