SINGAPORE - Singapore's economy grew slightly more than initially estimated in the third quarter as manufacturing output was revised higher, although growth remained modest in the face of an uneven global recovery.
The city-state's economy is expected to grow 2.0-4.0 per cent next year after expanding around 3.0 per cent in 2014, the Ministry of Trade and Industry said in a statement.
The economy grew at an annualised rate of 3.1 per cent in the three months to September compared with the previous quarter. The government's prior estimate was growth of 1.2 per cent, while analysts had forecast an expansion of 1.3 per cent.
That growth marked an improvement from a revised 0.3 per cent contraction in the second quarter, when manufacturing activity fell sharply from the previous three months, stoking concern that government policies to curb the influx of foreign labour were dragging on growth.
Still, a sluggish global economy is likely to hurt the trade-dependent economy, a senior government official and analysts said.
Ow Foong Pheng, permanent secretary for Ministry of Trade and Industry said growth is likely to ease in the fourth quarter on a year-on-year basis, in line with projected slowdown in the global economy. "Externally, sectors such as the manufacturing and transportation & storage sectors are likely to slow, while growth in the construction sector will continue to be weighed down by the weakness in private sector construction activities,"she told reporters.
The economy grew 2.8 per cent in the third quarter from a year earlier, faster than the 2.3 per cent expansion of the previous three months. The government's prior estimate was 2.4 per cent.
The manufacturing sector rose an annualised 2.8 per cent in July-September period compared to the second quarter when the sector suffered a 14.9 per cent contraction.
The government's push to reduce a politically unpopular reliance on overseas workers has led to a tight labour market, driving up wage pressures and raising business-related costs.
Besides headwinds from such economic restructuring, an uneven global recovery and lacklustre exports have weighed on growth. "We have Singapore starting to latch on to this growth acceleration in the US but at the same time there are headwinds in the EU and China," said Wai Ho Leong, senior regional economist at Barclays in Singapore.
"Although we might see some pickup in exports, it might not be stronger than what we have seen today."