SINGAPORE: Singapore’s economic growth probably slowed in the fourth quarter as sluggish global demand weighed on the manufacturing sector, a Reuters poll showed.
Gross domestic product (GDP) likely expanded 1.3 per cent in the fourth quarter from a year earlier, moderating from 1.9 per cent year-on-year growth in the third quarter, according to the median forecast in the survey of 11 economists.
Compared with the previous quarter, GDP probably grew 1.7 per cent on annualised and seasonally adjusted basis, the poll showed, cooling from 1.9 per cent growth in the third quarter.
Growth next year is likely to be similar to the levels expected for this year of around 2 per cent, said Mr Vishnu Varathan, senior economist for Mizuho Bank.
The first half of 2016 is likely to “remain bumpy, if not lethargic”, Mr Varathan said. But he added momentum is likely to increase later in the year as China’s economy gradually responds to a raft of stimulus and monetary easing measures, boosting activity throughout the region.
A slowdown in China, the biggest destination for Singapore’s non-oil domestic exports, and sluggish global demand have weighed on Singapore’s manufacturing sector and economic growth this year.
Against a backdrop of low inflation and tepid global growth, Singapore’s central bank has eased monetary policy twice in 2015, and some analysts say it might ease further in 2016.
The Monetary Authority of Singapore could announce further “incremental accommodation” at its next semi-annual policy review in April, by reducing the appreciation slope of the Singapore dollar’s policy band and shifting to a flat slope, said Mr Edward Teather, an economist for UBS.
The MAS manages monetary policy by letting the Singapore dollar rise or fall against the currencies of its main trading partners within an undisclosed trading band based on its nominal effective exchange rate (NEER).
Singapore’s currency has weakened 6.3 per cent this year against a strong US dollar.