SINGAPORE, Oct 14 — Singapore’s economy unexpectedly expanded last quarter as services countered declining manufacturing, avoiding a technical recession even as China’s slowing growth hurts demand for the island’s exports.
Gross domestic product rose an annualised 0.1 per cent in the three months through September from the previous quarter, when it shrank a revised 2.5 per cent, the trade ministry said in a statement today. The median of 16 estimates in a Bloomberg News survey was for a 0.1 per cent contraction, with only four forecasting an expansion.
Prime Minister Lee Hsien Loong is seeking to seek new sources of growth for the city-state through a 10-year restructuring plan that includes reducing firms’ reliance on cheap foreign labor and boosting investment in research and development. Singapore’s export-dependent economy is vulnerable to swings in global trade demand, and its performance has reflected the regional fallout from China’s economic deceleration in recent quarters.
“We still have quite a bit of expansionary fiscal policy which would provide a floor to growth,” Michael Wan, a Singapore-based economist at Credit Suisse Group AG, said before the report. “We do still expect global growth to pick up, but the risk to that is obviously on the downside if you do see China continue to weaken as we move into 2016.”
The breakdown for Singapore’s 3Q GDP:
* Manufacturing fell an annualised 3.6 per cent from the previous three months
* Construction contracted 0.8 per cent
* Services gained 0.8 per cent
GDP rose 1.4 per cent in the third quarter from a year earlier, after growing a revised 2 per cent in the previous three months, today’s data showed. The median estimate in a Bloomberg survey was 1.3 per cent. — Bloomberg
