Technical recession or not, underlying factors matter more

SINGAPORE'S narrow escape from recession in the third quarter may be good news for consumer sentiment, but it is arguably more productive to focus on specific aspects of the economy, rather than the narrow binary of whether a technical recession is upon us - which, at any rate, could be overturned by updated figures.

Flash figures on Monday put third quarter year-on-year growth virtually flat at 0.1 per cent, the same as the previous quarter. On a quarter-on-quarter seasonally-adjusted annualised basis, growth was 0.6 per cent, a turnaround from the second quarter's 2.7 per cent contraction.

Singapore thus dodged a technical recession, defined as two consecutive quarter-on-quarter falls. Though of course better than the alternative, this close escape is arguably not good enough. Third-quarter figures actually underperformed economists' consensus forecasts of 0.2 per cent year-on-year growth and 1.2 per cent quarter-on-quarter growth.