The Singapore economy beat many analysts’ expectations, growing 2.1 percent in 2015, which is in line with government forecasts, based on advance GDP estimates from the Ministry of Trade and Industry (MTI) and reported Channel NewsAsia.
According to the central bank’s latest quarterly survey last month, private sector economists had expected full-year GDP growth to reach 1.9 percent, while the government had predicted growth of “close to two percent”.
In Q4 2015, the GDP expanded by two percent from the previous year, up slightly from the 1.8 percent growth registered in Q3 2015. On a quarter-on-quarter seasonally-adjusted annualised basis, the economy grew 5.7 percent in Q4, a significant increase from the 1.7 percent growth seen in the previous quarter.
The manufacturing sector contracted by six percent in Q4, making it the “weakest link” for the economy.
“Both cyclical and structural challenges are dampening the growth prospects of this sector. External competition, rising business costs and weak external demand were key challenges facing the manufacturing sector for the past years,” said DBS senior economist Irvin Seah.
The construction sector grew 2.2 percent, an improvement from the 1.1 percent growth posted during the previous quarter, while the services sector expanded by 3.2 percent.
Despite beating expectations, Seah noted that overall economic growth was at its slowest in six years.
Moreover, risks remain with the potential capital flight which may result from fears of further deceleration within the Chinese economy and from further US interest rate hikes.
“(The) growth outlook in the next six to nine months will remain tepid before an improvement in the later part of 2016 can be expected. This should bring overall GDP growth for 2016 to 2.1 percent,” added Seah.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
