Singapore economy expands slightly in third quarter

AP News
Posted: Oct 13, 2015 11:49 PM

SINGAPORE (AP) — Singapore's economy expanded slightly in the third quarter, narrowly avoiding recession after shrinking in the previous three months, preliminary figures showed Wednesday.

Separately, the Monetary Authority of Singapore said the pace of appreciation of the Singapore dollar will be "reduced slightly" for the second time this year, in a bid to revive exports and economic growth. Singapore uses its currency rather than interest rates to influence monetary conditions that can affect overall growth rates.

The Ministry of Trade and Industry said gross domestic product expanded 0.1 percent in the July-September quarter from the previous quarter. The economy of the trade-reliant city-state at the tip of peninsula Malaysia contracted 2.5 percent in the April-June quarter.

Construction and manufacturing contracted in the third quarter, partly reflecting the slowdown in China's economy, while services grew.

"Singapore is not yet out of the woods, as this is still just an advance estimate," said Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight. "Growth was positive by a wafer-thin margin," he said.

A recession is defined as two or more consecutive quarters of decline in GDP on a quarter to quarter basis.

Final GDP data for the third quarter will be released in November.

The Singapore government forecasts full year economic growth of between 2 and 2.5 percent, low compared with average growth rates for the past decade.

"The sense is that this sub-par state of affairs could last till mid-2016 before nascent China traction and broader global recovery helps provide a gentle lift," said Vishnu Varathan, senior economist at Mizuho Bank.