Singapore Q3 GDP likely rose 5.3 pct on year as manufacturing recovers

PHOTO: Singapore Q3 GDP likely rose 5.3 pct on year as manufacturing recovers

SINGAPORE - Singapore's economy likely expanded more than initially expected in the third quarter as electronics manufacturing rebounded, lending weight to the view that full-year growth could exceed the government's target range of 2.5 to 3.5 per cent.

Gross domestic product (GDP) grew 5.3 per cent in July-September from a year earlier, according to the median estimate of 15 economists surveyed by Reuters. That would be higher than the official advance estimate of 5.1 per cent reported last month.

Third-quarter GDP was unchanged from April-June on a seasonally adjusted and annualised basis, the poll showed, contrary to the advance estimate of a 1.0 per cent contraction.

The data will be reported on Thursday, Nov. 21.

September industrial production figures, which beat economist estimates, indicated the manufacturing sector grew 5.5 per cent on year in the third quarter, a full percentage point higher than the advance estimate of 4.5 per cent, said Citigroup economist Kit Wei Zheng. "All else equal, our estimates suggest the upward revision in manufacturing alone could bring Q3 GDP growth up to 5.3 per cent year-on-year," he said in a note to clients.

The recovery in manufacturing continued into October, with the purchasing managers' index (PMI) hitting a three-month high and non-oil domestic exports growing year-on-year for the first time since January.

Several banks said the government may adjust its growth forecast range for this year to reflect the recent improvement in economic data. DBS Bank, for instance, expects the government to raise the range to 3.5 to 4.0 per cent.