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Economist at UOB Group Barnabas Gan assessed the advanced data for Singapore’s GDP.

Key Quotes

“Based on advance estimates by the Ministry of Trade and Industry, Singapore’s 4Q20 GDP contracted 3.8% y/y, improving from 3Q20’s pace of -5.6% y/y. On a q/q seasonally adjusted basis, the economy expanded 2.1% in 4Q20, extending the +9.5% q/q sa growth in 3Q20.”

“Despite seeing a full-year contraction in 2020, the Singapore economy had continued to improve since the trough in 2Q20. We remain encouraged by the continued manufacturing expansions in November 2020, where industrial production rose 17.9% y/y then, and beating market expectations for a +14.1% y/y (+2.7% m/m sa).”

“However, the construction and services sectors may continue to contract at least into 1Q21. The uncertainties surrounding COVID-19 and its negative impact on global trade winds will likely continue to stay for the foreseeable future, which in turn may inject headwinds against Singapore’s trade and transport sectors.”

All-in-all, we keep to our call for Singapore to expand by 5.0% in 2021, against MTI’s outlook of between +4.0% and +6.0%. We recognise that the global backdrop will likely be favourable for Singapore’s economy for the year ahead. This includes the signing of the RCEP which Singapore will likely benefit immensely, while US president-elect Joe Biden may take on a more constructive and multilateral approach in trade with other countries.”