Singapore’s economic growth slowed in the Fourth Quarter (Q4) as factories lost steam, but a services sector recovery has bolstered expectations.
The economy expanded 3.1 per cent in the Q4 from a year earlier, advance estimates from the Ministry of Trade and Industry showed on Tuesday, slowing from the third quarter’s upwardly revised 5.4 per cent growth, which was the fastest on-year growth in nearly four years.
On an annualised and seasonally-adjusted basis, gross domestic product expanded 2.8 per cent, well-down from revised growth of 9.4 per cent in the third quarter, reports Reuters.
While the quarter-on-quarter growth figure was slightly below the median expectation in a Reuters poll of economists, growth seen in the services sector has fanned market expectations the Monetary Authority of Singapore could tighten policy in 2018.
The services sector grew 7.5 per cent on an annualised basis in the fourth quarter, its fastest growth since the fourth quarter of 2016.
The ministry said growth in this segment was driven by expansion in the financial, wholesale and retail sectors.
Weighing on growth, however, was the manufacturing sector, which lost some shine, contracting 11.5 per cent on an annualised basis after jumping 38.0 per cent in the third quarter.
Singapore’s strong full-year figures have been helped in large part by strong global demand for electronics products and components produced on the island, a trend that helped other Asian economies in late 2017.