Singapore downgrades 2016 GDP, exports forecasts after third-quarter contraction | Reuters

SINGAPORE Singapore downgraded its forecasts on economic growth and exports for 2016 after confirming a contraction in output in the third quarter, raising the risk of a recession amid fresh uncertainty around global trade under U.S. President-elect Donald Trump.The trade-reliant economy is expected to grow 1.0-1.5 percent this year, compared with the previous projection of 1.0-2.0 percent, the Ministry of Trade and Industry said in a statement on Thursday.The economy shrank 2.0 percent in the July-September period from the previous three months on an annualised and seasonally adjusted basis, the ministry said. That compared with the government's initial estimate on Oct.

Reuters November 24, 2016 07:00:07 IST
Singapore downgrades 2016 GDP, exports forecasts after third-quarter contraction
| Reuters

Singapore downgrades 2016 GDP exports forecasts after thirdquarter contraction
 Reuters

SINGAPORE Singapore downgraded its forecasts on economic growth and exports for 2016 after confirming a contraction in output in the third quarter, raising the risk of a recession amid fresh uncertainty around global trade under U.S. President-elect Donald Trump.The trade-reliant economy is expected to grow 1.0-1.5 percent this year, compared with the previous projection of 1.0-2.0 percent, the Ministry of Trade and Industry said in a statement on Thursday.The economy shrank 2.0 percent in the July-September period from the previous three months on an annualised and seasonally adjusted basis, the ministry said. That compared with the government's initial estimate on Oct. 14 of a 4.1 percent contraction and a median forecast of a 2.5 percent slump in a Reuters' poll.The affluent city-state's economy has been hobbled by dwindling exports amid stubbornly weak global demand, while domestic consumption has also remained anaemic with entire floors at some central shopping malls empty.Non-oil domestic exports are seen falling 5.0-5.5 percent this year, the trade agency International Enterprise Singapore said in a separate statement, versus a previous forecast of 3.0-4.0 percent contraction.

Activity in the manufacturing sector declined 9.1 percent in the third quarter from the prior three months, the latest data showed, better than an initial estimate of a 17.4 percent contraction.The sector's outlook remained bearish with exports in October sharply down.

The external and domestic headwinds have raised the risk of a recession in Singapore, and heightened the chance of fiscal or monetary stimulus over the near term, analysts said. The central bank held its exchange-rate based policy unchanged in its October meeting, though analysts say a deteriorating growth outlook could force it to ease again at its next review in April 2017.With Trump's Nov. 8 election victory and his campaign promise to tear up international trade deals threatening to shatter a fragile global recovery, Singapore's open economy remains among some of the most vulnerable markets to U.S. protectionism.Services producing industries fell a revised 1.3 percent in the July-September period, slightly better than the earlier estimate of a 1.9 percent slide.

Among the services industries, the financial sector shrank 4.7 percent on-quarter.Gross domestic product grew 1.1 percent in the third quarter from a year earlier, the latest government estimate showed, higher than the advance estimate of 0.6 percent growth and a 1.0 percent expansion in the Reuters survey. (Reporting by Jongwoo Cheon and Masayuki Kitano; Editing by Shri Navaratnam)

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