Signs Of Life As Services Continue To Outperform
BMI View: The Singaporean economy has shown some nascent signs of life lately, with a strong services sector powering real GDP growth to a surprise 5.1% year-on-year performance in Q313. As a result of the economy's better than expected performance, as well as material revisions to H113 figures, we have upgraded our full-year real GDP 2013 forecast to 3.6% from 3.1% previously. That said, we believe that a somewhat middling external demand picture will likely effect a modest slowdown from the current pace of growth in 2014, and therefore retain our 3.2% forecast for next year.
The Singaporean economy has shown increasing signs of life lately, with Q313's real GDP growth coming in at an impressive 5.1% year-on-year (y-o-y) versus consensus estimates of 3.8%. While the y-o-y figures in the quarter contrasted sharply with the quarter-on-quarter (q-o-q) picture, which reflected a slight contraction of 1.0% (against consensus estimates for a 4.0% q-o-q, seasonally adjusted, annualised decline), we nevertheless believe that a short-term pick-up in the economy is in the works. As has been the case for the past few quarters, the main driver of the economy's growth was the services sector, which expanded by 5.7% y-o-y on the back of strong finance and insurance, as well as wholesale and retail trade activity.
Services Still Vulnerable To External Conditions
|Services Lead The Way Again|
|Singapore - Real GDP & Selected Sectors, % chg y-o-y|