SINGAPORE Nov 16 Singapore cut its growth
forecast for this year to around 1.5 percent and warned of a
subdued 2013 on Friday as updated third-quarter data and October
export numbers showed weakness in electronics manufacturing and
The trade-dependent economy is expected to grow 1-3 percent
next year, with risks on the horizon from the U.S. fiscal
cutback and the eurozone crisis, the Ministry of Trade and
Industry (MTI) said in a statement.
"Growth could come in slightly below 1.5 percent, should
weakness in externally oriented sectors continue into the final
quarter of 2012," Ow Foong Pheng, permanent secretary at MTI,
said at a press conference.
The new growth outlook for 2012, at the lower end of an
earlier 1.5 to 2.5 percent forecast, came as the government
revised third quarter gross domestic product to show a far
steeper contraction of 5.9 percent from the previous quarter on
a seasonally adjusted and annualised basis.
The government's advance estimate was for a 1.5 percent
contraction, while economists polled by Reuters expected the
economy to have shrunk 2.9 percent quarter-on-quarter.
The economy grew 0.3 percent in the third quarter from a
year earlier, the government said, slower than the advance
estimate of 1.3 percent and forecasts of 0.9 percent.
"It's a pretty bad number. The downward revision is almost
more than three times the advance estimate, so it tells you how
difficult it is to make accurate forecasts in such an
environment," said Citigroup economist Kit Wei Zheng.
"All-in-all it suggests par growth conditions (for 2013) but
not necessarily so bad to the point of it being recessionary,
just pretty slow and sluggish."
Growth in the first and second quarters were revised upwards
to 1.6 and 2.5 percent, respectively.
The government said non-oil domestic exports rose 7.9
percent in October from a year earlier, far better than the
forecast of 3.1 percent in a Reuters poll.
International Enterprises Singapore said separately it now
sees non-oil domestic exports growing just 2-3 percent this
year, down from its previous forecast of 4-5 percent.
Singapore's manufacturing slumped a seasonally adjusted and
annualised 9.6 percent in the third quarter from April-June,
while financial services shrank 4.6 percent. Manufacturing was
flat in the second quarter while financial services grew an
annualised and seasonally adjusted 2.9 percent
Wealthy Singapore, a major Asian business centre whose trade
is three times the size of its economy, has been rocked by
problems in the West that have crimped demand for its exports
and hurt financial services.
With around 1.5 percent growth this year, Singapore will lag
neighbours such as Indonesia and Malaysia that can count on
larger domestic markets.
Indonesia's central bank last week said it expected economic
growth of 6.3 to 6.7 percent next year as strong domestic demand
and investment largely offset the impact of weak exports.
"I will characterize the outlook still in the soft patch,
some signs of stabilisation and we won't get a full recovery
until the risks are resolved," said Sim Moh Siong, currency
strategist at Bank Of Singapore.
(Reporting by Kevin Lim, Rachel Armstrong, Anshuman Daga, Saeed
Azhar and Charmian Kok; Editing by John O'Callaghan and Eric