Dear Valued Clients,
Welcome to our E-Newsletter November 2018
We hope this finds you well!
We are now two months away before we bid farewell to year 2018. Looking back at the last three quarters, Singapore’s economy has seen many challenges. The trade relationship between the world’s two biggest economies has been on the rocky water and that has weighed on many economic activities across the globe.
Singapore Q3 GDP Growth
According to Ministry of Trade and Industry (“MTI”) advance estimates that was released on October 12, Singaporean economy has seen a slower growth rate than expected to 2.6% as manufacturing moderates. Singapore’s gross domestic product (“GDP”) has seen a 4.6 % year on year growth in the first quarter, while the second quarter recorded a 4.1 % year on year. The country’s economy grew 4.7 % in the July-September period on a quarter-on-quarter basis and seasonally adjusted, a figure that shows faster than the 1.2 % growth in the preceding quarter.
The manufacturing sector, one of the major building blocks of the economy, expanded by 4.5 % on a year-on-year basis in Q3, down from the 10.6 % growth as recorded in the previous quarter. It slowed down due to many reasons like the fading electronics cycle and the rising trade tensions. The output expansions in the electronics, biomedical manufacturing, and transport engineering clusters are the important pillars that support the growth. Weighed down by the weakness in public sector construction activities, construction continued to moderate in Q3, contracting by 3.1 % year on year in Q3. Though Q3 is the weakest quarter so far in 2018, the MAS assured that the country’s economy would remain steady in the quarters ahead as the tightening move of monetary policy comes.
Biannual Macroeconomic Review by the Monetary Authority of Singapore (“MAS”)
The MAS released its latest biannual macroeconomic review on October 26. The 115-page report was revealed two weeks after the MAS tightened monetary policy for the second time in 2018. In the report, MAS acknowledged that the global economic outlook is becoming more and more uncertain since its last review in April 2018. Singaporean economy will see a slower but firm economic growth rate pace for the rest of the year and in 2019. MAS has reiterated its projection for the full-year figure, which will be in within the upper half of the range, though to the official forecast has previously projected the 2018’s growth to be between 2.5 and 3.5%. The GDP sees an average of 3.4 % year-on-year growth in the second and third quarter of 2018 – which shows 0.7% lower if compared with the previous two quarters.
The 115-page report revealed that Singapore’s economy would remain resilient despite the growing global trade tension and uncertainties. While the trade spat between China and the United States has weighted on economic activities across the globe, Singapore’s economy manages to hold steady against global uncertainties and challenges with continued expansion. However, the negative spillovers are something undeniable in the quarters ahead where it might pose certain downside risks to growth.
As we look to the quarters ahead, we continue our pledge to remain committed to excellence and keep up with the constant changes and innovations to serve you better. We thank you for your support and patronage!
Read More in our E-Newsletter November 2018.