Singapore's Economy Expands at Weaker Pace Than Estimated

(Bloomberg) -- Singapore’s economy grew at a slower pace in the fourth quarter than previously estimated, a sign that U.S.-China trade tensions and weaker global demand are starting to bite.

• Gross domestic product increased an annualized 1.4 percent from the prior quarter, lower than the government’s earlier projection of 1.6 percent and the median forecast of 1.5 percent in a Bloomberg survey. The economy grew 1.9 percent in the fourth quarter from a year earlier.

Key Insights

• Growth in both total merchandise trade and non-oil domestic exports is expected to be between zero and 2 percent this year, the report said, citing a slowing global economy, U.S.-China tensions and tighter financial conditions
• Trade, which makes up an outsized share of the city state’s growth, has also been hit by a fading of the electronics production boom. Exports fell in December at the fastest rate in more than two years
• While economic growth held above 3 percent for a second year in 2018, this year’s expansion should be slightly below the midpoint of a 1.5 percent to 3.5 percent range, Loh Khum Yean, permanent secretary for the Ministry of Trade & Industry, said in a media briefing after the report’s release
• Sectors likely to support growth this year include information and communications, education, health and social services, along with a rebound in construction; expect a moderation in financial services, wholesale trade and transport
• Loh said the external outlook for Singapore had “weakened slightly” since November. That complicates things for the central bank, which tightened policy twice in 2018, ahead of its next decision in April

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• In a separate report, Enterprise Singapore estimated non-oil domestic export growth of 4.2 percent in 2018, versus a previous projection of 5.5 percent to 6 percent

--With assistance from Myungshin Cho, Indranil Ghosh and Melissa Cheok.

To contact the reporter on this story: Michelle Jamrisko in Singapore at mjamrisko@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Chris Bourke, Michael Heath

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