Gross domestic product rose 5.2% from a year earlier, the fastest pace in more than three years, versus a median estimate of 5%.
Compared to the previous quarter, GDP rose a seasonally adjusted and annualized 8.8%, higher than an earlier estimate of 6.3%
Growth forecast range for 2017 raised to 3-3.5% from 2-3%; economy seen expanding 1.5-3.5% next year.
A healing in global trade this year has helped boost export-reliant economies like Singapore’s, with manufacturing buoyed by demand for electronics goods. Growth has started to broaden out to other industries, such as services, giving economists and the government reason to upgrade their full-year projections.
Prime Minister Lee Hsien Loong said earlier this week that growth could exceed 3% in 2017.
The trade ministry said Thursday global growth is expected to improve next year, on the back of faster expansion in the US and some emerging markets. The US economy will probably “pick up slightly” due to a resilient labour market and modest business investment while growth in the eurozone area and in China is set to moderate, the officials said.
“The synchronised global recovery has legs,” said Chua Hak Bin, a Singapore-based senior economist with Maybank Kim Eng Research. A rebound in corporate spending in many economies, including in Southeast Asia, portends that “this investment revival will be the theme that will emerge in 2018.”
Export growth is set to taper off next year, with International Enterprise Singapore saying in a separate report on Thursday that expansion will probably be zero to 2% in 2018, compared with an estimated 6.5% to 7% for this year.
Downside risks for next year include US policy uncertainty, lingering protectionist sentiments, and tensions around North Korea, according to the ministry. At the same time, Singapore should continue to fare quite well, with domestic-focused industries and the labor market improving.
“We also see signs that the recovery is broadening,” with business services and retail looking better even though third-quarter growth was “primarily supported by manufacturing,” Loh Khum Yean, permanent secretary at the trade ministry, told reporters.
Manufacturing surged almost 35% in the third quarter from the previous three months, while the services industry, which makes up about two-thirds of the economy, grew an annualized 3.2%. Construction continued to suffer, contracting for a third quarter by 5.3%.
Growth has been surprisingly strong across Southeast Asia, with third-quarter data from the Philippines and Malaysia last week and Thailand this week exceeding forecasts, providing a more upbeat tone to the region as the US Federal Reserve tightens monetary policy.
Singapore’s central bank left its policy stance unchanged last month, but gave itself room to tighten if necessary. Jacqueline Loh, deputy managing director at the Monetary Authority of Singapore, told reporters on Thursday that the October stance remains appropriate and the regulator will continue to monitor developments. – Bloomberg