Based on advance estimates by the MTI, Singapore’s economy grew 4.6% YoY in 3Q17, up from the 2.9% growth in the previous quarter. This was above the street’s expectations, based on Bloomberg’s consensus of 3.8%. On a QoQ, seasonally-adjusted annualized basis, the economy expanded by 6.3%, an improvement from the 2.4% growth in 2Q17.

Growth was driven mainly by the manufacturing sector, which saw 23.1% QoQ growth, compared to just 3.2% in 2Q17. This was supported mainly by the electronics, biomedical manufacturing and precision engineering clusters. Construction contracted 9.2% QoQ, a reversal compared to 2.4% growth in 2Q17. Finally, services growth slowed to 1.5% QoQ after 2Q17’s 3.3% expansion.

Meanwhile the MAS also announced that it will maintain the rate of appreciation of the S$NEER policy band at 0%. The width of the policy band and the level at which it is centred will be unchanged, in line with the expectations of OCBC Treasury Research and Strategy.

Source: OCBC Research - 13 Oct 2017