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|11 February, 2019

Singapore's Q4 GDP growth may be revised lower on weaker manufacturing, services

Third consecutive quarter of slower year-on-year growth

A view of JTC and Sun Electric's SolarRoof project in Singapore July 24, 2018.

A view of JTC and Sun Electric's SolarRoof project in Singapore July 24, 2018.

REUTERS/Edgar Su

SINGAPORE - Singapore's economy likely grew at a slower pace than initially estimated as growth in the city-state's manufacturing and services sectors come under strain from slowing demand.

Final gross domestic product (GDP) is forecast to expand 2.1 percent in October-December from a year earlier, a Reuters poll of 10 economists showed, slightly down from the 2.2 percent seen in the advanced estimate and the third quarter's 2.3 percent.

"Final fourth quarter GDP growth will likely be downgraded slightly on the back of weak manufacturing growth in December and continued softness in some services indicators, including transport and bank loans," Maybank Kim Eng's senior economist, Hak Bin Chua said.

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This would be the slowest year-on-year pace since the third quarter of 2016, when it grew 1.2 percent, as well as the third consecutive quarter of slower annual growth.

On a seasonally adjusted and annualised quarter-on-quarter basis, growth in the July-September period was forecast at 1.6 percent, unchanged from advanced estimates and slower than the third quarter's 3.5 percent rise.

Weakening growth momentum for Singapore's open economy - a high-tech manufacturing base and transportation hub - underscores the risks to Asia's export economies from the protracted U.S.-Sino tariff war.

Singapore's central bank has repeatedly warned in the past year that a heated trade war between the United States and China - among its major trade partners - could hurt the domestic economy.

On Jan. 2, the Ministry of Trade and Industry said 2018 full-year growth was 3.3 percent, well within its 3.0-3.5 percent forecast range, but lower than the 3.6 percent growth seen in 2017, which was a 3-year high.

Manufacturing output in the city-state fell sharply in December, slowing to 2.7 percent growth year-on-year compared with 7.6 percent in November. 

Growth in services-producing industries slowed throughout the year. In the fourth quarter, the sector grew 1.9 percent from a year earlier, slowing from 2.6 percent in the third.

Singapore's exports, meanwhile, recorded its worst decline in more than two years in December as shipments of electronics, which was the main driver of growth in 2017, declined.

The final GDP data is due on Friday at 8:00 a.m. (0000 GMT).

(Editing by Jacqueline Wong) ((fathin.ungku@thomsonreuters.com ; +65-8578-6640; Reuters Messaging: fathin.ungku.thomsonreuters.com@reuters.net))

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