Singapore economy grows 0.7% in Q3, 1% sequentially: MTI flash estimates
Tessa Oh
SINGAPORE’S economy grew 0.7 per cent year on year in the third quarter of 2023, an improvement from the previous quarter as manufacturing posted a milder contraction, advance estimates from the Ministry of Trade and Industry (MTI) showed on Friday morning (Oct 13).
On a seasonally adjusted quarterly basis, gross domestic product grew 1 per cent, faster than the previous quarter’s 0.1 per cent growth.
This was an improvement from Q2’s 0.5 per cent year-on-year growth. Private-sector economists polled by Bloomberg were expecting less – 0.4 per cent year-on-year growth, and 0.6 per cent sequential growth.
The Monetary Authority of Singapore said on Friday that it expects full-year growth in 2023 to come in “at the lower half” of the official forecast range, which is between 0.5 per cent and 1.5 per cent.
The central bank left monetary policy settings unchanged, and announced that it would shift to a quarterly monetary policy statement schedule from next year.
The better-than-expected third-quarter growth came on the back of an improvement in the manufacturing sector, which posted a milder contraction than expected in Q3, said OCBC chief economist Selena Ling.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Nevertheless, this was still the fourth straight quarter of contraction for the sector, which tumbled 5 per cent – from the preceding quarter’s 7.7 per cent contraction.
Output declined year on year for all manufacturing clusters, except transport engineering. Sequentially, the manufacturing sector expanded by 0.2 per cent, an improvement from the previous quarter’s 1.5 per cent contraction.
Meanwhile, the services industries moderated in Q3, with growth easing to 1.9 per cent, a slower rate than the previous quarter’s 2.8 per cent growth.
Given this, the better-than-expected third-quarter performance is a “fractional cheer at best”, said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore.
“More likely, it is a tentative relief of some pickup, after averting a technical recession in Q2,” he said, noting that quarter-on-quarter growth averaged around 0.2 per cent for four consecutive quarters, and has been bumping along 0.2 per cent to 0.3 per cent for six straight quarters.
In Q3, the goods-producing industries as a whole shrank 3.5 per cent year on year.
The construction sector grew 6 per cent on the year, easing from the 7.7 per cent expansion in Q2. The growth was supported by expansions in both public and private sector construction output, said MTI.
On a quarterly basis, the sector grew 0.6 per cent, moderating from the previous quarter’s 2.7 per cent growth.
The wholesale and retail trade sector and the transport and storage sector collectively expanded 0.6 per cent year on year in Q3, moderating from a 2.2 per cent growth in Q2. On a quarterly basis, the group shrank 0.1 per cent, reversing from a 3 per cent expansion the previous quarter.
The group of services sectors comprising information and communications, finance and insurance, and professional services expanded 1.5 per cent on the year, extending the preceding quarter’s 1.2 per cent increase. Sequentially, the group grew 0.7 per cent, easing from Q2’s 1.1 per cent growth.
The remaining group of services sectors – accommodation and food services, real estate, administrative and support services and other services – expanded 4.7 per cent year on year, down from the previous quarter’s 6.1 per cent rise.
All sectors within this group expanded, with the accommodation sector in particular registering “robust growth” on the back of recovery in international visitor arrivals.
On a quarterly basis, growth was 1.4 per cent, an acceleration from 0.4 per cent in the previous quarter.
Copyright SPH Media. All rights reserved.
