Singapore GDP growth rate at three-year high as preliminary figures revised sharply higher

The y-y Q4 GDP growth rate is revised to 2.9% from 1.8% and that for the full year 2016 to 2% from 1.8%.

Employees are seen by their workstations at a printed circuit board assembly factory in Singapore Reuters

The Singapore economy expanded 2.9% year-on-year in the three months to December as per the final numbers released on Friday (Feb 17), sharply higher than 1.8% recorded in the flash estimates on 3 January.

The surprise revision that took the Q4 rate to its highest since the third quarter of 2014 has also reflected in the full year growth rate for 2016, which is now at 2%, above 1.9% in 2015 and higher than 1.8% initially estimated.

The Singapore dollar strengthened and local shares advanced on the news.

The Singapore dollar stayed near the week's strongest level, as so far this week, it has gained 0.3% against the greenback. The USD/SGD pair slipped to 1.4166 from 1.4185 when the data was released but soon pared the gains.

At 9:15 AM Singapore Time, the pair traded at 1.41733 from the previous close of 1.41727. The STI index, Singapore's benchmark share index, was up 0.2%.

It was the manufacturing sector that mainly contributed to the overall growth with as much as 11.5% expansion, compared to previous quarter's 1.8% growth and above the initial estimates of 6.5% rise.

In manufacturing, electronics and biomedical sectors drove the expansion, namely semiconductors, pharmaceuticals and medical technology, the detail showed.

The services producing industries advanced 1%, compared to a 0.4% growth in the September quarter and initial estimates of 0.6%. Contributions came from wholesale and retail trade, transportation and storage, accommodation, finance and insurance and other services, Statistics Singapore said.

However, the construction sector contracted by 2.8%, extending the 2.2% decline in the third quarter, and in line with earlier figures due to a sharper drop in private sector construction activities.

On a quarterly basis, the GDP advanced an annualized 12.3%, recovering from a 0.4% contraction in the previous quarter and above earlier estimates of 9.1%.

It is the strongest growth rate since the first quarter of 2011, mainly due to a rebound in manufacturing which surged 39.8 % rebounding from a 5% decline in Q3.

For 2017, the GDP is expected to expand between 1-3%.

Trade Data

Separately, the island economy said on Friday that its non-oil exports performed much better than expected in January even though the surplus has dwindled.

Non-oil shipments rose 5% in the first month of the year from the previous month, rebounding from a 2.4% in December and compared to analysts' expectation of 0.7% decline.

Year-on-year, it grew 8.6%, slower than the December rate of 9.1% but beating market consensus of 7% growth. The balance of trade came in at $3.3 billion, down from $6.1 billion of December.

Singapore GDP Chart