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Singapore Sees Economy Losing Momentum as Export Boom Eases

Manufacturing output has weakened recently as demand moderated. (Photo: Getty Images)

By Michelle Jamrisko

Singapore’s economy lost some of its momentum in the fourth quarter and the government sees growth moderating slightly this year as an export boom in 2017 eases.

While manufacturing in the trade-reliant economy was boosted last year by a surge in electronics exports, output has weakened recently as demand moderated. Even with that easing, the economy posted full-year growth of 3.6 percent in 2017, and is set to expand slightly above the middle of the 1.5 – 3.5 percent forecast range this year, the trade ministry said.

“The manufacturing sector is likely to continue to expand and provide support to growth in the overall economy,” the ministry said in a statement. “In particular, the electronics and precision engineering clusters are projected to sustain a healthy, though more moderate, pace of growth in 2018.”

The generally robust outlook gives policy makers room to announce expected tax increases in the Feb. 19 budget to help pay for increased spending on health and retirement benefits as the population ages rapidly.

The outlook also gives the Monetary Authority of Singapore scope to tighten policy this year after opening the door to a possible move in their last decision in October. The central bank’s next policy announcement is scheduled for April.

Jacqueline Loh, deputy managing director of the MAS, told reporters on Wednesday that the central bank hasn’t changed core or headline inflation forecasts since October and that the “monetary policy stance remains as announced then.”

The finance and transportation industries are set to benefit from firm external demand this year, and growth will probably broaden out to domestic-focused sectors, such as retail and food services as employment picks up, the ministry said. Construction and the marine and offshore engineering cluster will remain weak in 2018, it said.


With assistance from Myungshin Cho and Ailing Tan. To contact the reporter on this story: Michelle Jamrisko in Singapore at

To contact the editors responsible for this story: Nasreen Seria at Shamim Adam.

© 2018 Bloomberg L.P