SINGAPORE - Powered by manufacturing, the Singapore economy expanded by 4.6 per cent in the third quarter, the highest growth in more than three years and much better than forecast.
Analysts polled by Bloomberg had tipped growth of 3.8 per cent in the three months to September, after the economy grew by a stronger-than-expected 2.9 per cent in the second quarter as exports and manufacturing rebounded.
The last time the economy performed so well was in the first quarter of 2014, when year-on-year growth came in at 4.9 per cent, the same as the previous quarter.
The manufacturing sector continued its strong performance, growing by 15.5 per cent on a year-on-year basis in the third quarter, faster than the 8.2 per cent growth in the previous quarter, according to advance estimates from the Ministry of Trade & Industry on Friday (Oct 13).
Growth was driven by the electronics, biomedical manufacturing and precision engineering segments. On a quarter-on-quarter basis, manufacturing grew at a faster pace of 23.1 per cent, compared to the 3.2 per cent growth in the second quarter.
The services producing industries grew by 2.6 per cent, similar to the 2.5 per cent growth in the second quarter, with growth largely coming from the finance & insurance, wholesale & retail trade and transportation & storage segments. Quarter-on-quarter, the services sector expanded by 1.5 per cent, moderating from the 3.3 per cent growth in the previous quarter.
The construction sector continued to suffer, contracting by 6.3 per cent, extending the 6.8 per cent decline in the previous quarter. The sector was weighed down mainly by continued weakness in private sector construction activities. Quarter-on-quarter, construction contracted by 9.2 per cent, a reversal from the 2.4 per cent growth in the second quarter.
Quarter-on-quarter, the economy expanded by 6.3 per cent, a big improvement from the 2.4 per cent growth in the second quarter.
The Government in August narrowed upwards its forecast for economic growth this year to 2 per cent to 3 per cent, from an earlier estimate of 1 per cent to 3 per cent. Growth came in at 2.7 per cent in the first quarter.
For the full-year, private sector economists polled by Singapore's central bank earlier this year said they expect growth to come in at at 2.5 per cent.
At the same time on Friday morning, the Monetary Authority of Singapore (MAS) in its semi-annual monetary policy decision kept its exchange-rate based policy steady as expected by most analysts even as growth surged to a three-year high.
The Singdollar policy band is now on a path of zero appreciation against the currencies of key trading partners - a "neutral" policy stance put in place in April last year amid slow growth and low inflation.