Singapore economy likely to have grown 2.5-3.5% in 2013

Similar growth forecast for 2014.

Advance estimates from the MTI, the Singapore economy grew by 5.1% YoY in 3Q13, much better than the street’s expectations of 3.8% growth, and also better than the 4.2% growth seen in 2Q13, but OCBC notes that on a seasonally adjusted, annualised basis, the economy contracted by 1% QoQ, reversing 2Q13’s 16.9 % surge.

"Manufacturing output fell by 3.4% QoQ, reversing the 33.5% expansion in 2Q13, while construction contracted by 8.8%, compared to 2Q13’s 20.9% growth, mainly due to weaker public sector construction activities. Finally, services expanded by 1.0% after 2Q13’s 12.3% rise; the financial services sector shrank as equity and foreign exchange market activities fell on tapering concerns by the Fed and tensions in Syria," said OCBC.

The MTI has kept Singapore’s 2013 GDP growth forecast at 2.5-3.5%, and barring unforeseen events, 2014 is likely to see similar growth.

Meanwhile, the MAS has kept the slope and width of the S$NEER policy band unchanged, as well as the level at which it is centred. This takes into account the balance of risks between external demand uncertainties and rising domestic inflationary pressures.