SINGAPORE (Nov 26): Revised final figures from the Ministry of Trade and Industry (MTI) on Nov 22 show that Singapore’s economy grew 3% q-o-q in 3Q2018 on an annualised and seasonally adjusted basis, missing the initial government estimate of 4.7%. 3Q GDP growth came in at 2.2% compared with a year ago, falling short of the advance estimate of 2.6%.
Looking ahead, MTI has adjusted its forecast for 2018 GDP growth to 3% to 3.5%, from 2.5% to 3.5% previously, while also indicating a wider 1.5% to 3.5% range for 2019’s GDP growth forecast. The ministry sees a slightly weaker external outlook for 2019 compared with that in 2018, and believes risks in the global economy are tilted to the downside.
In reaction to the weaker-than-expected 3Q GDP figures, Maybank Kim Eng is cutting its GDP growth forecast for 2018 to 3.2% from 3.4% previously, with the view that 4Q GDP is likely to be lacklustre. Economist Chua Hak Bin believes GDP growth will slow to 2.2% in 2019, below the midpoint of MTI’s 1.5%-to-3.5% range. “Given slower growth and muted inflation risks, we do not expect the Monetary Authority of Singapore to tighten again next April. The Singapore dollar is currently trading at +1.2% above the mid-point of the band, by our estimates,” says Chua in a Nov 22 note. The restrained economic outlook did not stop the Straits Times Index from gaining 2.73 points, or 0.09%, to close at 3,041.38 points on Nov 22. Regional markets put up a mixed performance on Nov 22, with no indices closing either higher or lower than 1%.
