The Week In Numbers: Singapore’s Economy Grows 5.2% in Q3
Singapore’s gross domestic product (GDP) grew by 5.2% year-on-year in the third quarter of 2017, the fastest in nearly four years. This was an acceleration from the 2.9% growth in the previous quarter. On a quarter-on-quarter seasonally adjusted basis, the economy expanded by a massive 8.8%. The strong economic showing was led once again by a robust manufacturing sector, which expanded 18.4%. Services grew by 3.2% and non-oil exports increased 7.6%.
The robust growth in the third quarter prompted the Ministry of Trade and Industry to upgrade its 2017 GDP growth-forecast to 3% to 3.5% from an earlier estimate of 2% to 3%. As for 2018, Singapore’s GDP is expected to increase by 1.5% to 3.5%.
On the contrary, Britain’s Office for Budget Responsibility (OBR) has reduced its GDP growth expectations for 2018 to 1.4%, compared to the 1.6% forecasted earlier, a reflection of the slowdown due to last year’s Brexit vote. The forecasts for 2019 and 2020 were even more acute as the GDP growth forecast was cut to 1.3% for both years, compared with earlier forecasts of 1.7% and 1.9%, respectively. Britain is now expected to run a budget deficit of 1.3% of GDP by the 2021/2022 financial year, nearly double the previous forecast of 0.7%.
Meanwhile, both Thailand and Malaysia’s economies experienced strong growth for the third quarter of 2017. Thailand’s economy expanded 4.3% year-on-year, its highest growth rate in more than three years. Malaysia, South East Asia’s third-largest economy, expanded by 6.2% in the third quarter, putting it on track to deliver growth of 5.2% to 5.7% for the whole of 2017. Earlier, Malaysia’s government had already revised its 2017 full-year growth projection to 4.8% from 4.3%.
Finally, consumers in Singapore might have to pay higher goods and services tax (GST) within the next few years. Tax experts believe that an announcement might be on the cards as soon as Budget 2018. This is to aid increased government spending in the future. Government expenditure already outpaced revenue by S$5.62 billion for the financial year 2017. The GST was first implemented at a single rate of 3% in 1994, before being raised to 4% in 2003 and to 5% in 2004. The last GST raise happened in 2007 when it was brought to 7%.