GDP to grow 0.5-1% in 2019: MTI

Manufacturing performed better than expected in Q3.

Singapore’s GDP growth is projected to be in between 0.5% to 1% in 2019, up from the earlier flash estimates of 0%-1%, according to forecasts from the Ministry of Trade and Industry (MTI).

Manufacturing and trade-related services sector is expected to remain “subdued” in Q4 due to downswing in the global electronics cycle. However, construction, information & communications, finance & insurance, and education, health & social services are expected to post steady growth.

In addition, the manufacturing sector performed “better than expected” in Q3, turning around a contraction from the previous quarter by rising 7.6% QoQ saa, attributed to expansions in the biomedical manufacturing cluster and aerospace segment despite the decline in electronics cluster.

As for 2020, the economy is projected to pick up modestly and expand 0.5% to 2.5%, in line with the expected recovery of the global electronics cycle. Particularly, the manufacturing sector is expected to return to positive growth from the gradual recovery in the electronics and precision engineering clusters.

At the same time, the information & communications, finance & insurance, and construction sectors are expected to see better performance, whilst the education, health & social services segments are likely to remain resilient.

However, growth in many of Singapore’s key final demand markets, such as US and China, is expected to ease due to remaining trade tensions.

The city-state’s economy has narrowly averted a technical recession in Q3, growing 2.1% QoQ saa and reversing a 2.7% contraction in Q2.