Singapore’s economy posted faster growth in the second quarter than previously estimated by the government as a recovery in global trade helped to buoy manufacturing.
Highlights of GDP report Gross domestic product rose a seasonally-adjusted and annualized 2.2 percent in the second quarter from the previous three months, the Ministry of Trade and Industry said on Friday, revising its earlier estimate of 0.4 percent Median estimate of six economists in a Bloomberg survey was for growth of 0.5 percent Compared to the same period last year, GDP rose 2.9 percent in the second quarter, higher than the 2.5 percent median estimate in a Bloomberg survey Ministry narrowed growth forecast range for 2017 to 2-3 percent from 1-3 percent
Big Picture
As one of Asia’s most trade-dependent countries, Singapore has benefited from a recovery in global trade since late last year, led by strong Chinese demand for electronics and other manufactured goods. The economy is likely to grow 2.5 percent in 2017, Prime Minister Lee Hsien Loong said on Tuesday, a projection reiterated by the Ministry of Trade and Industry on Friday.
While export-led industries are expanding strongly, there are mounting risks. Consumer-focused industries such as retail remain weak in the face of job cuts and rising debt. There are also doubts over whether China can sustain its growth as the government tries to curb a credit bubble.
The MTI cited three main risks to the global economy -- trade protectionist threats, faster-than-expected interest-rate increases in the U.S. and a pullback in credit demand in China -- but said the potential for these to have a significant impact on growth has eased compared to three months ago.
The Monetary Authority of Singapore, the nation’s central bank, has kept its policy stance unchanged for more than a year in the face of subdued price pressures and weak growth. The MAS uses the exchange rate as its main tool and is scheduled to make its next policy decision in October.
Other Details
The services industry, which accounts for about two-thirds of the economy, grew an annualized 3.3 percent in the second quarter from the previous three months Manufacturing rose an annualized 2.9 percent; MTI said the sector will continue to provide support to the Singapore economy in the second half of the year, backed by strong performance in the electronics and precision engineering clusters Non-oil domestic exports rose 2.7 percent from a year earlier; in a separate report, International Enterprise Singapore narrowed its forecast range for non-oil domestic export growth for this year to 5-6 percent from 4-6 percent. – Bloomberg