The advance estimate for Singapore Gross Domestic Product (GDP) third quarter growth rate was released on 12 October. It was reported that the third quarter GDP contracted 1.5% on a quarter-on-quarter seasonally-adjusted annualised basis. With the latest report on the economy, the third quarter’s GDP contracted more than estimated. The contraction was 5.9% and this came after second quarter’s growth rate of 0.5% (thus avoiding a technical recession).
All sectors went into negative territory on quarter-on-quarter basis. The worst performing sectors were Construction, contracting at 17.2% and Manufacturing, contracting at 9.6%.
Ministry for Trade and Industry (MTI) now lowered GDP growth forecast for the whole year to be around 1.5%, instead of the earlier forecast of between 1.5% to 2.5%. For 2013, the forecast is growth of 1.0% to 3.0% because of uncertain global environment.
Inflation, measured by Consumer Price Index (CPI), for third quarter was 4.2% higher compared to a year ago. Housing costs increased by 6.3%; Transport costs increased by 7.1%; Food prices rose by 2.2%; Healthcare costs increased by 5.1%.
Singapore economy contracted 5.9% in third quarter on quarter-on-quarter basis, though year-on-year basis, it grew by mere 0.3%. Inflation remained elevated at 4.2% in the quarter. This however was moderated from 5.3% in the second quarter. With twin problems of negative GDP growth rate and higher inflation, it is not good news for workers, retirees and investors. Year-end bonus of workers will be affected negatively, retirement fund has to content with rising cost of living, investments are affected by poor economy both locally and internationally.
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