Singapore's Ministry of Trade and Industry said on Friday that the country's economic growth is expected to remain subdued for the rest of 2012 as external demand remained sluggish.
For the whole year, the economic growth is expected to be around 1.5 percent.
The official forecast range had been adjusted earlier from 1-3 percent at the beginning of the year to 1.5-2.5 percent. The economy narrowly escaped a technical recession in the third quarter after a revision of the quarter-on-quarter growth statistics for the second quarter to positive territory.
Meanwhile, trade promotion agency International Enterprise (IE) Singapore cut its forecasts for total trade and non-oil domestic exports, citing weak external demand.
They also announced their growth forecast for the economy and trade in 2013, saying that the external demand is expected to remain sluggish.
AROUND 1.5 PCT ECONOMIC GROWTH FOR 2012
The Singapore economy grew by 0.3 percent year on year in the third quarter, following the 2.5 percent increase in the second quarter. On a quarter-on-quarter basis, the economy contracted by 5.9 percent, after a revised growth of 0.5 percent in the second quarter.
The weak growth in the third quarter was attributed to weak external demand for sectors such as manufacturing and wholesale trade. On a quarter-on-quarter seasonally adjusted basis, the manufacturing sector contracted by 9.6 percent, largely due to contraction in the electronics sector.
The construction sector grew by 7.7 percent year on year, following the growth of 12.3 percent in the second quarter. On a quarter-on-quarter basis, the sector contracted by an annualized rate of 17.2 percent, due to a decline in private sector building activities.
TRADE GROWTH FORECAST CUT
International Enterprise (IE) Singapore cut its full-year non- oil domestic exports (NODX) growth from 4-5 percent to 2-3 percent. The agency said the revision came after the third quarter trade performances turned out weaker than expected due to weak external demand.
The projection for the total trade growth was also downgraded from 4-5 percent to 3-4 percent.
On a year-on-year basis, the total trade declined by 2.8 percent in the third quarter, following the expansion of 2.9 percent in the second quarter. Non-oil domestic exports (NODX), a key indicator for the external trade of the free trade hub, contracted by 3.2 percent year on year, in contrast to the growth of 3.7 percent for the previous quarter.
WEAK OUTLOOK FOR 2013
The Ministry of Trade and Industry said it expects a growth of 1-3 percent for 2013.
"The growth outlook for the Singapore economy remains cautiously positive," due to the expected sluggishness in the global economy, it said. "Nevertheless, backed by a healthy pipeline of projects, growth in specific clusters, such as transport engineering, as well as the construction sector, could provide support to the economy in 2013."
IE projected a growth of 3-5 percent for Singapore's total trade in 2013, citing expected slow growth of the advanced economies. The NODX growth in 2013 is expected to be between 2 and 4 percent.
IE said its forecast is based on the world economic growth of 3. 6 percent projected by the International Monetary Fund.
"Global outlook for 2013 is shrouded with uncertainties. Possible downside risks include the looming U.S. fiscal cliff and further slowdown in the eurozone economy," it said. "Should any of these risks occur, Singapore's trade forecast would be lowered."
It said the eurozone is expected to have slow growth as it will have difficulties raising output due to the austerity measures. The United States economy is expected to stabilize and register a slow growth, but there are significant downside risks with looming automatic tax increases and implied spending cutbacks. Enditem
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