Singapore Sees Economic Recovery in 2020 as Growth Rebounds
The gross domestic product showed the economy grew an annualized 2.1% in the third quarter.
(Bloomberg) --
Singapore’s economy expanded at a faster pace in the third quarter than earlier estimated, with the city state projecting the recovery will take hold next year.
The final reading of gross domestic product showed the economy grew an annualized 2.1% in the third quarter from the previous three months, versus a previous projection of 0.6%, the Ministry of Trade & Industry said in a report Thursday. The economy is set to expand 0.5%-2.5% next year, compared with 0.5%-1% this year, it said.
Compared with a year ago, GDP rose 0.5% in the third quarter, up from an initial estimate of 0.1%. The median forecast in a Bloomberg survey was for growth of 0.4%.
“Given the growth outlook for Singapore’s key final demand markets, and the projected recovery in the global electronics cycle in the year ahead, MTI expects growth in the Singapore economy to pick up modestly in 2020 as compared to 2019,” the ministry said.
With no clarity about whether U.S.-China trade tensions will be resolved soon, Singapore’s trade-reliant economy is showing mixed signs, with the electronics industry experiencing a tentative rebound and exports still contracting.
In a separate report Thursday, Enterprise Singapore sees non-oil export growth of 0%-2% in 2020, compared with a contraction of 9.5% to 10% this year.
“Prospects for 2020 tilt toward stabilization,” said Selena Ling, an economist at Oversea-Chinese Banking Corp in Singapore. OCBC sees growth of 1%-2% in 2020, with non-oil exports likely to recover “if there is no further escalation of U.S.-China trade tensions in the form of fresh tariffs/hikes,” she said.
Singapore’s currency was little changed at 1.3626 per dollar in early Asian trading Thursday.
What Bloomberg’s Economists Say
It’s difficult to tell how much of Singapore’s growth pickup in 3Q was related to diverted business from Hong Kong, and to what extent this would be sustained. One clue may be in the deposits held by Singapore banks. Foreign currency deposits jumped from 1.6% of annual 2018 GDP in June to 3.0% in September -- the highest share since at least 1996.
Click here to read the full report.
Tamara Mast Henderson, Asean economist
The central bank, which eased monetary policy for the first time since 2016, said last month it expects a turnaround in the economy toward year’s end, with a modest improvement next year alongside stable global prospects.
Edward Robinson, chief economist of the Monetary Authority of Singapore, told reporters Thursday that policy is “assessed to remain appropriate at this point in time” and the “policy stance then will depend on how the economy evolves.”
The MTI said there were “signs of stabilization in the global economy even though global growth remains weak.” World growth is projected to see a “modest pickup” in 2020 led by emerging markets, while growth in Singapore’s main markets of the U.S. and China will likely ease, it said.
Manufacturing rebounded from a recession to grow an annualized 7.6% in the third quarter from the previous three months. Services rose 0.4%, while construction contracted 0.1%. For a more detailed breakdown of the sectors, click on this table.
--With assistance from Tomoko Sato.
To contact the reporters on this story: Michelle Jamrisko in Singapore at mjamrisko@bloomberg.net;Ruth Carson in Singapore at rliew6@bloomberg.net
To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Michael S. Arnold
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