Singapore's 1.4% growth in 3Q staves off recession

Is this something to cheer about?

Based on advance estimates by the MTI, Singapore’s economy grew by 1.4% YoY in 3Q15, slower than the 1.8% growth in 2Q15, but better than the street’s 1.3% expansion. On a seasonally adjusted, annualized basis, the economy expanded by 0.1% QoQ, staving off a technical recession for now. Manufacturing continued to contract by 3.6% QoQ following a 17.4% contraction in 2Q15, while construction also fell into negative territory at -0.8% in 3Q15 vs 12.4% QoQ growth in the preceding quarter. The services segment was the only one that grew on a sequential basis (+0.8% in 3Q15 vs +0.2% in 2Q15).

Meanwhile, though the MAS will continue with its policy of a modest and gradual appreciation of the S$NEER policy band, the rate of appreciation will be reduced slightly, says OCBC Investment Research analyst Low Pei Han.

"There will be no change to the width of the policy band and the level at which it is centred. This follows the move to reduce the rate of appreciation of the band in Jan this year, and is supportive of economic growth into 2016, while ensuring price stability over the medium term," Low added.