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Barnabas Gan, Economist at UOB Group, reviewed the growth outlook for Singapore.

Key Quotes

“Singapore’s third quarter economic growth expanded by a better-than-expected rate of 0.5% y/y (+2.1% q/q saar). With a positive q/q growth rate, Singapore has officially avoided a technical recession”.

“Growth is underpinned by a sustained expansion in the construction sector, while most services industries (except Wholesale & Retail and Transportation & Storage) grew when compared to the previous year. Manufacturing continued to drag on growth with a 1.7% y/y contraction, but much improved from the preliminary estimate of -3.5%, contributing most to the upward revision”.

Our growth outlook is kept at 0.5% and 1.5% in 2019 and 2020, respectively. This is in line with official estimates whereby 2019’s growth rate has been revised higher to 0.5 – 1.0%, while MTI pencils 2020 growth at 0.5 – 2.5%”.

We expect the Monetary Authority of Singapore to keep its monetary policy parameters unchanged at the next monetary MPS meeting in April 2020. This means keeping the slope (currently perceived at 0.5%), band width (perceived at 2.0%) and centering unchanged”.