Singapore's Advance GDP Reading May Belie Actual Economic Growth

  • Final reading has tended to differ from advance estimate
  • Deviation has averaged 4.3 percentage points since early 2010

If you want to know precisely how well the Singapore economy is doing, you may want to give the advance estimate due Jan. 4 a miss and wait for the final reading in February.

The reason: there has been a difference of 4.3 percentage points on average between the advance and final readings of gross domestic product growth since the start of 2010, based on annualized quarter-on-quarter data compiled by Bloomberg. The difference is a narrower 1 percentage point for U.S. GDP and 1.6 percentage points for Japan’s.

The disparity for Singapore’s GDP data has exceeded 10 percentage points twice during the period: the first being the third quarter of 2010 and the second in the last quarter of 2013.

Annualized quarter-on-quarter GDP growth has differed between advance and final readings.
Annualized quarter-on-quarter GDP growth has differed between advance and final readings.
Source: Bloomberg data compiled from government releases

The discrepancy doesn’t stem from any flaw, but highlights the limitation of using data from just the first two months of the quarter. The trade ministry publishes the advance estimate to provide an early indication of growth, the ministry said on Oct. 14. That day, it judged that expansion in the third quarter would be 0.1 percent on an annualized quarter-on-quarter basis. The final number in November showed growth was actually 1.9 percent.

Growth slowed to 1.3 percent in the fourth quarter, based on the median of economists’ forecasts compiled by Bloomberg. The Singapore dollar has weakened 6.3 percent this year against the U.S. currency, heading for the biggest annual decline since 1997.

The ministry hasn’t yet set a precise date for the release of the final reading. It couldn’t immediately be reached for comment on Thursday.

(Masaki Kondo is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.)

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