There are concerns that the recent property cooling measures could weigh down on the real estate and construction sectors.
Singapore’s gross domestic product (GDP) rose by 3.0 percent quarter-on-quarter on a seasonally-adjusted and annualised basis in Q3 2018, surpassing the previous quarter’s increase of 1.0 percent, reported the Business Times.
On an annual basis, the city-state’s economy rose by 2.2 percent.
However, both the quarterly and annual growth fell below forecasts of 4.2 percent and 2.4 percent respectively, according to median projections by 11 experts in a Reuters poll.
In particular, Singapore’s construction industry dipped 2.3 percent on a quarterly basis due to softer public-sector construction activities. The marginal increase is also slower than the 4.2 percent quarter-on-quarter gain in Q2 2018.
“There are concerns regarding the risk aversion and faster-than-expected hikes in interest rates causing excessive volatilities in the financial markets, and the property cooling measures weighing down on the real estate and construction sectors in the coming quarters,” said DBS economist Irvin Seah.
Looking ahead, the Ministry of Trade and Industry (MTI) expects Singapore’s economy to expand by 3.0 to 3.5 percent for the whole of 2018. But the agency thinks that GDP growth could weaken to 1.5 to 3.5 percent next year. This is due to declining global demand for electronics and the ongoing US-China trade war.
“Singapore’s economy is feeling the tremors from a slowing global economy and disruptions to global trade,” noted Maybank Kim Eng economists Lee Ju Ye and Chua Hak Bin.
Nonetheless, MTI believes that construction activity will likely recover by 2019, as works for contracts awarded since the second half of 2017 will likely start in the next few quarters.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email email@example.com