Singapore's advance GDP reading may belie actual economic growth

Office workers at Raffles Place.
Office workers at Raffles Place. PHOTO: ST FILE

SINGAPORE (BLOOMBERG) - 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 annualised quarter-on-quarter data compiled by Bloomberg. The difference is a narrower 1 percentage point for US 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.

The discrepancy does not 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 per cent on an annualised quarter-on-quarter basis. The final number in November showed growth was actually 1.9 per cent.

Growth slowed to 1.3 per cent in the fourth quarter, based on the median of economists' forecasts compiled by Bloomberg. The ministry has not yet set a precise date for the release of the final reading.