Singapore Sees Strong Economic Growth For The Rest of This Year
Singapore’s economy is expected to grow by 3 to 3.5 per cent for 2017, an upward revision from its initial range of 2 to 3 per cent.
Announcing this recently, the Ministry of Trade and Industry said the latest Economic Survey of Singapore showed the economy expanded 5.2 per cent in the three months to September compared to a year ago.
The expansion, said the ministry, marked the strongest quarterly expansion since 2013.
“It outpaced the 2.9 per cent growth in the preceding quarter, while it is also an upward revision from an earlier government forecast of 4.6 per cent,” it said in a statement.
Gross domestic product (GDP) powered up to 8.8 per cent during the third quarter, on a quarter-on-quarter seasonally adjusted basis.
This is well above the 2.2 per cent growth in the April-to-June period and also beat official estimates of 6.3 per cent.
Externally-oriented sectors such as the manufacturing, finance & insurance, wholesale trade and transportation & storage sectors primarily supported GDP growth for the third quarter.
Growth in the manufacturing sector surged by 18.4 per cent year-on-year, much faster than the 8.4 per cent growth in the preceding quarter.
Overall, all clusters within the manufacturing sector expanded, except the transport engineering cluster.
GDP growth in the first three quarters of 2017 came in at 3.5 per cent on a year-on-year basis, MTI said, adding that this was underpinned by stronger external demand.
Terence Ho, divisional director of Manpower Planning & Policy division at the Ministry of Manpower, said the local labour market is expected to “improve slightly” with the pick-up in economic growth, alongside the increased hiring during the year-end festive season.
As for core and headline inflation, the The Monetary Authority of Singapore (MAS) said its forecasts that it remains unchanged.
Accordingly, its current neutral policy stance “remains as appropriate”, said MAS deputy managing director Jacqueline Loh.
For the rest of the year, the economy is expected to “moderate but remain firm”.
Externally-oriented sectors are projected to continue to expand at a more modest pace and support growth for the rest of the year, while domestically-oriented sectors like the health, education & social services sector are also expected to remain resilient.
MTI’s revision comes after Prime Minister Lee Hsien Loong said on Sunday that Singapore’s economic growth could exceed 3 per cent this year.
Economic Growth For 2018 To Be Between 1.5 To 3.5%: MTI
As for the year ahead, MTI said global growth is expected to pick up marginally on the back of stronger growth in the US and some emerging markets and developing economies.
However, growth in several of Singapore’s key external demand markets such as China and the Eurozone is projected to ease in the coming year.
Downside risks remained and they were identified as faster than expected tightening of US monetary policy, as well as elevated global policy uncertainty.
This uncertainty was due to lingering concerns over protectionist sentiment in the US and brewing geopolitical tensions on the Korean peninsula.
Against this external backdrop, MTI expects the economy’s pace of growth to “moderate in 2018 as compared to 2017 but remain firm”.
The manufacturing sector is likely to continue to expand and provide support to overall GDP growth.
Wholesale trade, transportation & storage and finance & insurance which make up the externally-oriented servoces sector, are expected to benefit from the global economic recovery.
However, their growth momentum may ease in tandem with the moderation in growth in key advanced and regional economies.
Sectors such as information and communications, education, health and social services are likely to remain resilient, supported by domestic drivers of growth like the Smart Nation initiatives and expansions in healthcare facilities respectively.
However, due to continued weakness in construction demand, the performance of this sector is expected to remain lacklustre.
As such, MTI expects the Singapore economy to grow by 1.5 to 3.5 per cent in 2018.
Overall,MTI’s central view is that GDP growth in 2018 is likely to come in around the middle of the forecast range, barring unexpected outcomes in the global economy and key sectors in the domestic economy.