SINGAPORE- Singapore’s economy in the third quarter is expected to have expanded much more than initially thought and is likely to stabilize in the coming quarters, helped by a recovery in manufacturing, a Reuters poll found on Tuesday.
Final gross domestic product (GDP) is forecast to have grown a seasonally adjusted and annualized 2.1 percent from the second quarter, a Reuters poll of 13 economists showed, much more than the 0.6 percent growth in the government’s advance estimates. The economy contracted 2.7 percent in the quarter earlier.
“Final third quarter GDP is expected to be materially upgraded,” said Maybank Kim Eng economist, Lee Ju Ye.
“Manufacturing came in much stronger than expected in September and services growth likely picked up speed, particularly in finance, business and tourism-related services,” she added.
Singapore – which is due to hold an election within months – has like other trade-reliant Asian economies been hit hard by the escalating US-China trade war and a broader global slowdown.
Its manufacturing sector, which took a hit this year, surprised in September by reporting its first rise in five months on a surge in pharmaceutical output.
From the year earlier, economic growth is expected to be revised to 0.5 percent, higher than the 0.1 percent seen in advance estimates and the quarter earlier.
Singapore’s growth is also likely to stabilize in the fourth quarter and recover next year.
“The tension between the near-term stabilization if not modest pick-up in trade and lacklustre global capex remains, limiting the upside to final demand,” JP Morgan economist Sin Beng Ong said, however adding that weakness in electronics output could complicate the outlook.
Singapore exports in October shrank for the eighth straight month and were worse than analysts’ expectations as shipments of electronics continued to slide, official data showed on Monday.
Last month, Singapore’s central bank eased monetary policy for the first time in three years and narrowly dodged a recession. – Reuters