SINGAPORE (REUTERS) - Singapore GDP grew a revised 1.9 per cent in the third quarter on an annualised basis, the government said on Wednesday (Nov 25), a sharp revision up from its provisional forecast issued earlier of 0.1 per cent and well up from market expectations for a flat quarter.
The industry ministry forecast the economy to grow by close to 2.0 per cent this year, softer than a previous forecast of 2.0 to 2.5 per cent. It forecast 2016 GDP growth of 1.0 to 3.0 per cent.
Selena Ling, OCBC Bank economist:
"Services really came up to do the heavy lifting. It was really services that carried the day. Looking forward this bodes well going into the year end.
I think 2 per cent for full year growth should be a done deal. Question is what happens after the Fed lifts rates and what happens in China. But the growth forecast for next year is a conservative forecast.
It will really take a structural event to change policy such as what happened this time last year when we saw a huge drop in the oil price or if the Russian-Turkey-Syria situation escalates further."
Leong Wai Ho, Barclays Capital economist:
"Construction came in slightly stronger and this probably meant the final months of Q3 surprised on the upside. Services were probably better, led by financial and insurance.
Next year will resemble this year in terms of the growth profile, maybe slightly stronger. But overall a very weak tone of growth compared to previous years.
Labour is not going to grow as fast compared to previous years. Weak external demand has been pushing manufacturing lower.
I don't think so there is any urgency to ease because the economy is behaving as the MAS has assumed."
Francis Tan, United Overseas Bank economist:
"The estimate in the third quarter does not mean that growth is going to be a lot stronger in the next few quarters. It's just going to be pretty modest.
Downside risks remain a lot. The key risk is still oil prices pulling prices down. And when prices remain low, central banks will continuously adopt a fairly dovish policy in order to support economic growth."