Singapore Economic Forecast

Singapore Economic Outlook

October 16, 2018

Economic growth in the third quarter was relatively restrained in comparison to the second quarter’s solid performance. The manufacturing sector experienced a marked slowdown, while activity in the construction sector slumped for the ninth consecutive quarter. While growth in the services sector was stable, other indicators from the quarter corroborate the deceleration. Industrial production slowed to the lowest growth rate this year in August as output in the electronics, biomedical manufacturing, and chemicals sectors softened. Moreover, the manufacturing and electronics PMIs both ticked down in September, while a high base effect in the coming months—combined with the maturing of the global electronics cycle—suggests growth in the manufacturing sector will likely slow further in Q4. On a more positive note, annual growth in tourist arrivals picked up in August, while retail sales—excluding motor vehicles—accelerated in the same month.

Singapore Economic Growth

The economy is expected to lose steam in 2019 on the back of notably slower manufacturing growth. Domestic demand should buoy growth, however, supported by stronger consumer spending, thanks to a tight labor market and accelerating wage growth. The escalating trade spat between the U.S. and China and a resulting potential slowdown in global trade remain pivotal risks to the outlook given the highly open nature of the economy. Met the why particular panelists expect the economy to grow 2.6% in 2019, which is down 0.1 percentage points from last month’s estimate, and 2.5% in 2020.

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Singapore Facts

Bond Yield2.601.39 %Oct 18
Exchange Rate1.38-0.01 %Oct 18
Stock Market3,0700.18 %Oct 18

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