SINGAPORE - Singapore's economic growth exceeded forecasts in the fourth quarter, helped by services and construction activity, but its performance for 2015 was the weakest in six years as sluggish global demand hit the manufacturing sector.
Gross domestic product expanded by 5.7 percent in the fourth quarter on an annualised and seasonally adjusted basis, advance estimates from the Ministry of Trade and Industry (MTI) showed on Monday.
That was up from a downwardly revised 1.7 percent growth in the third quarter, and well above the median forecast of 1.7 percent growth in a Reuters survey.
The economy was boosted by the services sector, which grew 6.5 percent in the fourth quarter and a 7.0 percent expansion in construction. The manufacturing sector underperformed, shrinking 3.1 percent. "Even though this number is stronger than expected, it remains sub-potential and that sort of 'not that great' growth scenario is present throughout Asia right now," said Vaninder Singh, an economist for RBS.
MTI said the construction sector was supported by a pick-up in public sector construction and that services industries were helped by the wholesale and retail trade as well as the finance and insurance sectors.
The Singapore dollar turned firmer to hit a session high of S$1.4155 per US dollar, compared to S$1.4190 before the GDP figures were released.
Full-year growth for 2015 slowed to 2.1 percent from 2.9 percent in 2014. That was the weakest performance since 2009, when Singapore's economy was hit by the global financial crisis and contracted 0.6 percent.
The government had previously forecast that the city-state's economy would grow by "close to 2.0 percent" in 2015.
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 in 2015.
Growth is expected to remain moderate in 2016, with the government forecasting GDP growth of 1.0 to 3.0 percent.
In the fourth quarter, gross domestic product expanded 2.0 percent year-on-year.
Against a backdrop of low inflation and tepid global growth, Singapore's central bank eased monetary policy twice in 2015, most recently in October. The central bank's next semiannual policy review is in April. "I think for now we don't expect a change because they already eased twice last year, so it will really take probably another leg down in terms of inflation or growth for them to warrant a third easing," said Selena Ling, head of treasury research and strategy for OCBC Bank.