Advance estimates for Singapore's gross domestic product showed a fall of 1.9 percent quarter-on-quarter in the three months to March (seasonally adjusted and annualised), well down from an increase of 12.3 percent in the three months to December. Year-on-year growth in Singapore's GDP moderated from 2.9 percent in the three months to December to 2.5 percent in the three months to March.
This moderation in headline GDP growth was mainly driven by the manufacturing sector, which saw quarter-on-quarter growth fall from 39.8 percent in the three months to December to minus 6.6 percent in the three months to March, with year-on-year growth in the sector falling from 11.5 percent to 6.6 percent. Weaker growth in manufacturing reflected a drop in production in the biomedical industry (where output is often volatile), as well as in transport engineering and general manufacturing. This was partly offset by stronger output in the electronics and precision engineering industries. Outside of manufacturing, Singapore's construction sector posted stronger growth in the three months to March, while output growth in the services sector picked up on the quarter but weakened on the year.
Officials at the Monetary Authority of Singapore noted in their semi-annual policy statement, also released today, that the Singapore economy contracted in the three months to March, but argue that "the underlying momentum in the economy remains intact". In particular, they expect an improved outlook for the global economy to support growth in the local export sector. Officials forecast the economy to grow by between 1.0 percent and 3.0 percent this year, after expanding by around 2.0 percent in 2016. Reflecting this assessment, they left policy settings unchanged, continuing to target zero appreciation in the nominal effective exchange rate.
Advance GDP estimates are mainly computed using data from the first two months of the quarter. Revised GDP estimates for the quarter, incorporating more comprehensive data, will be published in May.
GDP refers to the aggregate value of the goods and services produced in the economic territory of Singapore. GDP estimates are compiled by the output, expenditure and income approaches. Output-based GDP refers to the sum of gross value added generated by economic activities in the domestic economy. Expenditure-based GDP refers to the sum of private consumption expenditure of households including non-profit institutions serving households, government consumption expenditure, gross capital formation and net exports of goods and services. Income-based GDP refers to the sum of incomes receivable by each institutional sector from the domestic production of goods and services which includes compensation of employees, gross operating surplus and taxes (less subsidies, if any) on production and on imports
In order to compare the real value of output/expenditure over time, it is necessary to remove the effect of price changes. This is achieved by selecting the price structure of 2010 as the base according to which the goods and services in other years are re-valued. The resulting aggregates after adjustment for price changes are known as constant-price estimates.
The advance GDP estimates are computed largely from data in the first two months of the quarter (e.g. 1st Quarter is based on Jan and Feb; 2nd Quarter is based on Apr and May). They are intended as early estimates of GDP growth in the quarter, and are subject to revision when more comprehensive data become available.
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