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Singapore GDP Expands More Than Estimated In Q3

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The Singapore economy expanded more than estimated in the third quarter as the manufacturing sector contracted at a slower pace on the back of strong biomedical manufacturing.

Gross domestic product grew 0.5 percent on a year-on-year basis in the third quarter, slightly faster than the 0.2 percent growth in the previous quarter and the advance estimate of 0.1 percent, the Ministry of Trade and Industry said Thursday.

On a quarter-on-quarter seasonally-adjusted annualized basis, the economy expanded 2.1 percent, a turnaround from the 2.7 percent contraction in the preceding quarter. The third quarter growth was revised up from 0.6 percent.

The production side breakdown of GDP showed that the manufacturing sector shrank only 1.7 percent year-on-year in the third quarter as all clusters expanded except electronics.

The services producing industries grew 0.9 percent driven by finance and insurance. At the same time, the construction sector expanded 2.9 percent.

The government forecast the city-state economy to grow 0.5 percent to 1 percent compared to the previous forecast of zero to 1 percent. For 2020, the government projected 0.5 percent to 2.5 percent growth.

The MTI observed that uncertainties in the global economy remain. US-China trade tensions remain a source of risk despite the resumption of trade talks.

Elsewhere, Enterprise Singapore downwardly revised its non-oil domestic exports forecast to -10 percent to -9.5 percent. NODX for 2020 was seen between 0.0 percent and 2.0 percent.

The central bank had eased its monetary policy in October for the first time since 2016. Edward Robinson, chief economist of the Monetary Authority of Singapore said today that the policy remains appropriate.

Looking ahead, Alex Holmes, an economist at Capital Economics, said Singapore's economy has passed the worst. However, the recovery is likely to be slow going.

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