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Analysts at Standard Chartered expect Singapore’s Q3 GDP report which is due to be released on 12 October 2018 to show that growth to have moderated to 2.2% y/y from 3.9% in Q2, due to high base effects.

Key Quotes

“Manufacturing sector growth likely eased from the robust 10.2% y/y growth in Q2. July-August 2018 industrial production expanded 5% y/y and the September print faces an unfavourable base effect. Furthermore, PMIs have moderated since the start of 2018. Headline PMI growth eased to 0.8% y/y in September 2018, the lowest in 26 months, while electronics PMI contracted 4.1% y/y – the fifth consecutive month of y/y decline.”

“Services sector growth may also have eased from 2.8% y/y in Q2 on moderating financial market activity but likely remained firm, supported by still-robust loan growth. Better labour market conditions also probably helped support domestic spending. Meanwhile, the construction sector likely continued to contract y/y for the ninth consecutive quarter, although we expect the pace of contraction to have eased.”

“Our GDP growth tracker suggests upside risk to our Q3 GDP growth forecast. Our tracker is more reliant on readily available externally-driven activity data, such as IP, which continues to grow at a faster pace (albeit moderating) than domestic-oriented sectors. We are cautious about being overly optimistic, as the recovery in the services sector is still nascent.”