Singapore’s economic prospects remain uncertain amidst a number of risks, like the sluggish property market.
Singapore’s gross domestic product (GDP) rose by 1.8 percent in Q4 2016 on an annual basis, surpassing the revised 1.2 percent growth in the quarter before, revealed estimates published yesterday by the Ministry of Trade and Industry (MTI) and reported Channel NewsAsia.
On a quarterly and seasonally-adjusted basis, the local economy expanded by 9.1 percent, a far cry from the 1.9 percent decline in Q3 2016. Consequently, the city-state evaded a technical recession, which is a slowdown in economic activity for two consecutive quarters.
The positive figures for the fourth quarter also pushed economic growth for the entire year to 1.8 percent, exceeding the authorities’ projection of 1.0 percent to 1.5 percent. However, it is lower than the two percent growth in 2015 and represents Singapore’s slowest yearly GDP expansion since 2009, when the economy dipped by 0.6 percent in the aftermath of the Global Financial Crisis.
In Q4 2016, the construction industry was the sole laggard, recording a contraction of 2.8 percent year-on-year versus the 0.2 percent slide in the previous quarter. This sharper drop was primarily due to lacklustre construction activity in the private sector, the MTI said. On a quarterly and seasonally-adjusted basis, output from the construction industry shrank by 4.7 percent, an improvement from the 14.8 percent fall in Q3 2016.
Despite the better statistics in Q4, the city-state’s economic prospects remain uncertain amidst a number of external and domestic risks, like President-elect Donald Trump’s policies, the anticipated more aggressive rate hikes from the US Federal Reserve and the sluggish property market in Singapore.
“The tide is gradually turning for 2017, with the long-awaited domestic manufacturing recovery finally taking root,” said Selena Ling, Head of Treasury Research & Strategy at OCBC Bank.
“However, the 2017 outlook remains tentative … amid key uncertainties like the Trump presidency potentially having spillover effects for global trade, China’s slowdown, and heightened market volatility, especially on the currency and interest rate front, potentially weighing on corporate and consumer confidence,” she added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
