Singapore GDP expansion of 2.4% frustrates hopes of higher growth

Construction continued to disappoint.

According to advance estimates by OCBC Investment Research, the Singapore economy grew 2.4% YoY, lower than the street’s expectations of a 2.7% growth, but at the same pace of growth in the previous quarter.

OCBC adds that on a QoQ seasonally adjusted annualized basis, the economy grew by 1.2%, a reversal from the 0.1% contraction in 2Q14. Manufacturing expanded by 1.2% QoQ in 3Q14, in contrast to the 15.1% contraction in the previous quarter. 

Construction continued to contract, however, at -2.7% QoQ, after 2Q14’s -2.4%. As for services, the sector grew by 1.3%, slower than the 4.8% expansion in 2Q14. To recap, the MTI is forecasting growth of 2.5-3.5% for this year vs. the 3.9% growth last year.