Singapore’s GDP Growth Slowed Down in Fourth Quarter 2017

The economy of Singapore is presumed to have slowed down in the last quarter of the year but a sufficient boost will keep the monetary policy tightening until next year.  

The Gross Domestic Product is anticipated to increase by 2.7 percent in the same period of the year based on the median forecast of Reuters.

Despite the moderate momentum, growth will still become “constructive” supported propped up by manufacturing, according to the chief economist from Asia at Continuum Economics. The third quarter has been the fastest development of the economy as it rose 5.2 percent in almost four years due to the surge in manufacturing data and a number of analysts urge a stricter monetary policy in 2018.

The predicted figure for GDP growth in the fourth quarter will be published on January 2. In comparison to last year’s record, this softens the year-on-year growth.

The industrial production data published on Tuesday grew less than the forecasted value in the previous year that supports the slower year-on-year economic growth in the fourth quarter.

The GDP growth became sluggish every quarter with an annualized basis to 2.9 percent from 8.8 percent in the third quarter.

Overall, it seems that the economy is progressing positively for the Monetary Authority of Singapore to review the monetary policies and tighten in the succeeding policy review in April, according to Hirofumi Suzuki, an economist from Sumitomo Mitsui Banking Corporation.

Other nations are tightening their monetary policies but it does not necessarily mean that the nation's economic conditions have weakened, he said.

Suzuki believes that the MAS should maintain the current policies while the inflations remain calm. Singapore gained so much this year amid a surge in global demand being a trade-reliant economy, particularly on electronics products and components.

The government increased their GDP forecast for the year within the range of 3.0 to 3.5 percent in November. These growth development has been the quickest since three years ago as it almost reaches 3.6 percent.

The forecasted growth is within 1.5 to 3.5 percent next year. The exchange rate policy of the central bank was maintained in October and adjusted the reference rate to extend the current settings which would give way to tightening next year.