There is good news as Singapore's economy is expected to grow by 3 to 3.5 per cent for 2017, an upward revision from the initial projected range of 2 to 3 per cent. The GDP of Singapore touched 5.2 per cent in the third quarter bolstered by rapid growth in manufacturing, finance and insurance, wholesale trade and transportation and storage sectors. Projection of Singapore economy for 2018 was made in the range of 1.5 to 3.5 per cent.
Making the announcement today, Ministry of Trade and Industry (MTI), said, “Singapore economy is expected to grow by ‘3.0 to 3.5 per cent’ in 2017, and by ‘1.5 to 3.5’ per cent in 2018.”
Prime Minister of Singapore Lee Hsien Loong pointed out that Singapore’s economy is looking up in a speech delivered on Sunday.
On the growth of Singapore economy in the third quarter, MTI said, “The Singapore economy grew by 5.2 per cent on a year-on-year basis in the third quarter, faster than the 2.9 per cent growth in the previous quarter. On a quarter on-quarter seasonally-adjusted annualised basis, the economy expanded by 8.8 per cent, accelerating from the 2.2 per cent growth in the second quarter.
This marked the strongest quarterly expansion since 2013. It is also an upward revision from an earlier government forecast of 4.6 per cent and outpaced the 2.9 per cent growth in the preceding quarter.
The manufacturing sector grew by 18.4 per cent year-on-year, much faster than the 8.4 per cent growth in the preceding quarter. All clusters within the manufacturing sector expanded, with the exception of the transport engineering cluster. On a quarter-on-quarter seasonally adjusted annualised basis, the sector expanded by 34.6 per cent, a sharp acceleration from the 4.0 per cent growth in the second quarter.
The transportation and storage sector grew at a faster pace of 4.6 per cent year-on-year, compared to the 3.4 per cent expansion in the second quarter. The sector’s growth was supported by the water transport and air transport segments, which saw improvements in sea cargo and air passengers handled respectively.
Growth in the information and communications sector came in at 4.9 per cent on a year-on-year basis, higher than the 1.5 per cent in the preceding quarter. The sector’s robust performance was driven primarily by the IT and information services segment, which benefited from the healthy demand for IT solutions
While making projection of the remaining period of the year, MTI said, “For the rest of the year, Singapore’s GDP growth is expected to moderate but remain firm. In particular, the externally-oriented sectors are projected to continue to expand, albeit at a more modest pace.
Domestically-oriented sectors like the health, education and social services sector are also expected to remain resilient.
While making projection of 2018, MTI said, “Global growth is expected to pick up marginally in 2018 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 due to lingering concerns over protectionist sentiment in the US and brewing geopolitical tensions on the Korean peninsula.
“Against this external backdrop, the pace of growth of the Singapore economy is expected to moderate in 2018 as compared to 2017, but remain firm,” it added.
The manufacturing sector is likely to continue to expand and provide support to overall GDP growth.
Externally-oriented services sectors, such as wholesale trade, transportation & storage and finance & insurance, 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.
MTI expects the Singapore economy to grow by 1.5 to 3.5 per cent in 2018.