Reuters – 4
hours ago
By Kevin Lim
SINGAPORE, Nov 16 (Reuters) - Singapore cut its growth forecast
for this year to around 1.5 percent and warned of a subdued 2013 on
Friday as updated third-quarter data and October export numbers
showed weakness in electronics manufacturing and financial
services.
The trade-dependent economy is expected to grow 1-3 percent next
year, with risks on the horizon from the U.S. fiscal cutback and
the eurozone crisis, the Ministry of Trade and Industry (MTI) said
in a statement.
"Growth could come in slightly below 1.5 percent, should
weakness in externally oriented sectors continue into the final
quarter of 2012," Ow Foong Pheng, permanent secretary at MTI, said
at a press conference.
The new growth outlook for 2012, at the lower end of an earlier
1.5 to 2.5 percent forecast, came as the government revised third
quarter gross domestic product to show a far steeper contraction of
5.9 percent from the previous quarter on a seasonally adjusted and
annualised basis.
The government's advance estimate was for a 1.5 percent
contraction, while economists polled by Reuters expected the
economy to have shrunk 2.9 percent quarter-on-quarter.
The economy grew 0.3 percent in the third quarter from a year
earlier, the government said, slower than the advance estimate of
1.3 percent and forecasts of 0.9 percent.
"It's a pretty bad number. The downward revision is almost more
than three times the advance estimate, so it tells you how
difficult it is to make accurate forecasts in such an environment,"
said Citigroup economist Kit Wei Zheng.
"All-in-all it suggests par growth conditions (for 2013) but not
necessarily so bad to the point of it being recessionary, just
pretty slow and sluggish."
Growth in the first and second quarters were revised upwards to
1.6 and 2.5 percent, respectively.
The government said non-oil domestic exports rose 7.9 percent in
October from a year earlier, far better than the forecast of 3.1
percent in a Reuters poll.
International Enterprises Singapore said separately it now sees
non-oil domestic exports growing just 2-3 percent this year, down
from its previous forecast of 4-5 percent.
Singapore's manufacturing slumped a seasonally adjusted and
annualised 9.6 percent in the third quarter from April-June, while
financial services shrank 4.6 percent. Manufacturing was flat in
the second quarter while financial services grew an annualised and
seasonally adjusted 2.9 percent quarter-on-quarter.
Wealthy Singapore, a major Asian business centre whose trade is
three times the size of its economy, has been rocked by problems in
the West that have crimped demand for its exports and hurt
financial services.
With around 1.5 percent growth this year, Singapore will lag
neighbours such as Indonesia and Malaysia that can count on larger
domestic markets.
Indonesia's central bank last week said it expected economic
growth of 6.3 to 6.7 percent next year as strong domestic demand
and investment largely offset the impact of weak exports.
"I will characterize the outlook still in the soft patch, some
signs of stabilisation and we won't get a full recovery until the
risks are resolved," said Sim Moh Siong, currency strategist at
Bank Of Singapore. (Reporting by Kevin Lim, Rachel Armstrong,
Anshuman Daga, Saeed Azhar and Charmian Kok; Editing by John
O'Callaghan and Eric Meijer)
