Singapore’s Economy Contracts Annualized 4.1% in Third Quarter

Is Singapore on the Verge of a Recession?

Singapore’s economy contracted in the third quarter from the previous three months, according to an advanced estimate from the government, more signs that the Southeast Asian financial and trading hub is struggling in the face of a global slowdown.

Key Points

  • Gross domestic product fell an annualized 4.1 percent on a quarter-on-quarter basis, compared with a revised 0.2 percent expansion in the second quarter, the Ministry of Trade and Industry said in a statement Friday.
  • The median estimate of 14 economists in a Bloomberg survey was for zero gains in GDP
  • Compared with a year earlier, GDP rose 0.6 percent in the third quarter, slower than the 1.7 percent median estimate in a Bloomberg survey of 20 economists

Big Picture

GDP growth in the export-driven economy has been under pressure since last year, mainly due to a slowdown in global trade and lower energy prices hurting the city-state’s oil and gas services industry. Government measures to cool the property market and curb the intake of foreign workers are undermining profits in some key industries, while manufacturing is struggling to gain traction, Joseph Incalcaterra, a Hong Kong-based economist with HSBC Holdings Plc, said before the data was released. The economy expanded 2 percent last year, the slowest pace since 2009, and economists forecast even lower growth this year.

Other Details

  • The services industry, which accounts for about two-thirds of the economy, contracted an annualized 1.9 percent in the third quarter from the previous three months
  • Manufacturing plunged an annualized 17.4 percent in the period
  • The advanced GDP estimates only include data from July and August. The government is scheduled to publish final GDP data in November.

— With assistance by Myungshin Cho

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