Singapore Q3 GDP grows 0.6% year-on-year, below expectations

THE Singapore economy performed worse than the market had expected in Q3, expanding just 0.6 per cent compared to a year ago, according to advance estimates of gross domestic product (GDP) released by the Ministry of Trade and Industry (MTI) on Friday morning.

This was slower than the 2 per cent growth seen in Q2.

Private-sector economists polled by Bloomberg prior to the data release had a median growth forecast of 1.7 per cent year-on-year.

On a seasonally-adjusted quarter-on-quarter annualised basis, MTI said overall GDP contracted 4.1 per cent - a reversal from the annualised 0.2 per cent growth in the preceding quarter.

This was also worse than private-sector economists' forecasts; the market had been expecting flat quarter-on-quarter growth.

The manufacturing sector contracted by 1.1 per cent on a year-on-year basis in Q3, reversing the 1.4 per cent expansion in the previous quarter. It was primarily weighed down by a decline in the output of the transport engineering, biomedical manufacturing and general manufacturing clusters.

Services contracted slightly by 0.1 per cent on a year-on-year basis, compared to the 1.2 per cent growth in the preceding quarter.

"Growth was weighed down primarily by the wholesale & retail trade sector. Within the sector, the wholesale trade segment contracted while the retail segment posted positive growth, bolstered by motor vehicle sales," said MTI.

MTI will release updated GDP estimates for the third quarter in November, including performance by sectors, sources of growth, inflation, employment and productivity, in its Economic Survey of Singapore.