SINGAPORE (AFP) – Singapore’s economy returned to growth in July-September, reversing contraction in the previous three months, owing to a pick-up in the city-state’s key manufacturing sector, the government said Tuesday.
Compared with the second quarter, gross domestic product expanded 1.2 per cent on a seasonally adjusted annualised basis, advance estimates by the trade ministry showed. GDP shrank 0.1 per cent in the three months to June.
However, officials estimate the economy grew 2.4 per cent year on year, which is below analysts’ forecasts of 2.8 per cent.
Manufacturing, a key pillar of the trade-reliant economy, rose 1.2 per cent quarter-on-quarter, reversing a 15.1 percent decline in the preceding three months as global demand for exports such as electronics picked up.
But construction – another growth driver – shrank 2.7 per cent owing to a weak property market.
The government expects the economy to grow 2.5-3.5 per cent this year.
The Monetary Authority of Singapore (MAS) said in a separate statement it would maintain its policy for a modest and gradual appreciation of the local dollar, citing the need to keep inflation in check.
MAS, the city-state’s central bank, manages price stability through the foreign exchange rate rather than interest rate as the local dollar’s strength relative to other currencies can influence prices significantly.
“As long as the recovery in the global economy does not falter, Singapore’s growth should pick up over coming quarters,” research house Capital Economics said in a note.