Strong End To 2016 But Outlook Remains Onerous

Economic Research	4 January 2017
Singapore
Economic Update
Strong End To 2016 But Outlook Remains Onerous At its advance reading, Singapore’s 4Q16 GDP expanded 1.8% YoY, picking up from a 1.2% climb the quarter before. Going forward, we expect the island’s economic growth to soften, precipitated by: 1.   Slowing manufacturing growth, reflecting patchy external demand and fading replacement demand for commercial personal computers (PCs); 2.   Stabilising services sector, as gains from the rising US interest rates are offset by softer loan demand and a relatively strong SGD. Nevertheless, we raise our 2017 GDP forecast to 1.4% from 1.2% previously, on account of the higher-than-expected 4Q16 outturn. On a QoQ seasonally adjusted annualised (SAA) basis, Singapore’s GDP grew 9.1% in 4Q16, rebounding sharply from a 1.9% contraction the quarter prior. The manufacturing and services segments both recorded strong gains, while construction activities contracted at a slower pace. Economist:  Ng Kee Chou | +603 92802179