SINGAPORE - Singapore's economy grew by 2.2 per cent year on year in the fourth quarter of 2018, below economists' forecasts, flash estimates by the Ministry of Trade and Industry (MTI) on Wednesday (Jan 2) showed.
While only slightly under the 2.3 per cent growth in the previous quarter, economists had expected fourth quarter growth to come in at 2.5 per cent year on year, according to a Bloomberg consensus forecast.
Overall, the economy grew by 3.3 per cent in the whole of 2018, down from 2017's 3.6 per cent, as earlier announced by Prime Minister Lee Hsien Loong.
On a quarter on quarter seasonally adjusted annualised basis, the economy expanded at a slower pace of 1.6 per cent compared with the 3.5 per cent growth in the third quarter.
Manufacturing expanded by 5.5 per cent year on year in the fourth quarter, faster than the 3.7 per cent growth in the previous quarter.
This growth was largely driven by output expansions in the biomedical manufacturing and electronics clusters, although the precision engineering cluster shrank.
However, the manufacturing sector shrank 8.7 per cent on a quarter on quarter basis, the first for manufacturing in 2018, noted OCBC Bank’s head of treasury research and strategy Selena Ling.
This is a sign that the softening global demand environment is starting to weigh in, she added.
Front-loading activities, a practice in which American and Chinese manufacturers accelerate the orders of production and shipment to avoid potential tariffs due to the ongoing trade war, are also showing signs of fading, said Ms Ling.
The construction sector continued shrinking, contracting by 2.2 per cent year on year, extending the 2.5 per cent decline in the previous quarter. The contraction was primarily due to weakness in public sector construction activities.
The services producing industries also saw moderate growth, expanding by 1.9 per cent year on year compared with the 2.6 per cent growth in the previous quarter.
MTI will release the final growth figures for the fourth quarter and the whole of 2018, including performance by sectors, sources of growth, inflation, employment and productivity, in February.
The economy is expected to grow by between 1.5 per cent and 3.5 per cent this year.