Singapore's economy grew by 3.0 per cent in the third quarter, expanded at a much slower pace than initially thought, from the previous three months on an annualised and seasonally adjusted basis.
The growth rate was well below the government’s initial estimate in October of 4.7 per cent growth and also a median forecast of 4.2 per cent in a Reuters poll of 11 analysts.
In the second quarter, the economy expanded 1.0 per cent, the figures from Ministry of Trade and Industry (MTI) showed on Thursday, reports Reuters.
However, the government is flagging further moderation in the current quarter and warning that the US-Sino trade war will hurt growth in 2019.
The weakening outlook for the prosperous city-state - a bellwether for global growth because international trade dwarfs its domestic economy- underlines a shakeout in financial markets in recent months as investors worry about world trade, investment and corporate earnings prospects.
The weaker than expected economic momentum in the Q3 was largely driven by slackening in the manufacturing sector, a factor that looks set to keep policy makers cautious given the worsening international trade environment and the Sino-US tariff row.
“We did expect industrial production growth to moderate. But the pace of moderation was more prominent than initially thought,” UOB economist Alvin Liew said.
The city-state’s manufacturing sector grew at 3.5 per cent in the third quarter from a year ago, slowing sharply from 10.7 per cent growth in the quarter earlier.
On a year-ago basis, gross domestic product grew 2.2 per cent in the third quarter, slower than the advance estimate of 2.6 per cent growth, and below a 2.4 per cent rise forecast in the Reuters poll.
The MTI revised its forecast for GDP growth for 2018 to 3.0 to 3.5 per cent, from 2.5 to 3.5 per cent previously. It gave a wide range for 2019’s GDP growth forecast of between 1.5 to 3.5 per cent.