Singapore"s economy grows 4.4% on-year in Q4 2013

SINGAPORE: The Singapore economy grew 4.4 per cent on a year-on-year basis in the fourth quarter of 2013, down from 5.9 per cent in the previous quarter.

This is according to advance estimates from the Ministry of Trade and Industry.

The city-state’s fourth quarter gross domestic product (GDP) came in below economists’ expectations of about 4.8 per cent.

But some economists tell Channel NewsAsia that Singapore’s economic outlook in 2014 remains positive, thanks to the global economy picking up.

For the whole of 2013, the economy is estimated to have grown by 3.7 per cent.

This is in line with the government’s growth forecast of 3.5 to 4 per cent.

Still, experts see Singapore’s economy benefiting from the economic recovery in the US, Europe and China in 2014.

Vishnu Varathan, senior economist at Mizuho Bank, said: “We think that with the US surprising on the upside and China continuing to recover, with a bit of two steps forward, one step back, we still see Singapore as the barometer of the global economy, and gaining some momentum towards the four to five per cent range.”

The manufacturing sector expanded by 3.5 per cent on-year in the fourth quarter, compared to 5.3 per cent in the third quarter.

The slowdown was mainly due to a sharp fall in biomedical manufacturing output and a slower pace of growth from transport engineering.

Growth of the construction sector slowed to 4.7 per cent, due mainly to a slowdown in private sector activities.

The services producing industries grew 5.5 per cent, easing from the 6.5 per cent expansion in the preceding quarter amid slower growth in the wholesale and retail trade, and finance and insurance sectors.

Some analysts said the ongoing drive to build more housing and transport infrastructure should boost the construction industry.

And while business loans have picked up, loan restrictions recently imposed on individual borrowing should further dampen growth in household loans.

The US Federal Reserve’s decision to start quantitative easing (QE) tapering in January may bring some external headwinds.

Saktiandi Supaat, head of FX Research at Maybank, said: “Going forward, particularly from a broader perspective, could be the risk of balance of payment situation arising from some of the more vulnerable countries in Asia as a result of the tapering and expected tightening out of the advanced economies…”

Meanwhile, most economists are also expecting the Monetary Authority of Singapore to stick to its monetary policy stance at its next policy review in April due to rising inflation. 

Singapore"s economy grows 4.4% on-year in Q4 2013