Singapore: GDP growth records best result in two years in the third quarter
GDP reading: According to a preliminary estimate, GDP growth accelerated to 4.1% year on year in the third quarter from 2.9% in the second quarter, marking a two-year high and overshooting market expectations. On a seasonally adjusted quarter-on-quarter basis, economic growth rose to 2.1% in Q3, from the previous quarter’s 0.4% expansion, logging the fastest increase since Q1 2021.
Drivers: Looking at the details of the release, stronger momentum in the goods-producing sector drove the expansion: This sector’s growth came in at 6.6% year on year in Q3, accelerating from Q2’s flat result. The acceleration was chiefly due to a sharp rebound in manufacturing production, likely boosted by the electronics sector upcycle. That said, the services sector expanded at a slower pace, logging a 3.3% increase in Q3, down from Q2’s 3.6% increase. The moderation was broad-based, with most subsectors growing at a weaker pace compared to Q2.
Panelist insight: Commenting on the release, United Overseas Bank analyst Jester Koh stated:
“Factoring in the strong 3Q24 GDP performance, we raise our 2024 full-year real GDP growth forecast to 3.3% (from 2.9% prev), exceeding the upper end of MTI’s official forecast range of 2.0-3.0%. In addition, we lower our 2025 GDP growth forecast to 2.9% (from 3.2% prev).”