Singapore’s economic growth rose more than initially estimated in the fourth quarter, but the government downgraded the growth outlook as the China coronavirus outbreak is expected to severely hurt the domestic economy.
Gross domestic product rose 1.0 percent year-over-year in the fourth quarter, following a 0.7 percent increase in the preceding quarter, data from the Ministry of Trade and Industry showed on Monday. According to the initial estimate, the GDP grew 0.8 percent.
On a quarter-on-quarter seasonally-adjusted annualized basis, the economy expanded at a slower pace of 0.6 percent after a 2.2 percent growth in the prior quarter. This was in line with the initial estimate.
For the whole of 2019, the Singapore economy grew by 0.7 percent, slower than the 3.4 percent growth in 2018, as estimated. The latest pace of growth was the slowest in a decade.
The MTI downgraded the GDP growth forecast to minus 0.5 to 1.5 percent, with growth expected to come in at around 0.5 percent, the mid-point of the forecast range.
“The COVID-19 outbreak is expected to affect the Singapore economy through several channels,” the ministry said.
Manufacturing and wholesale trade are expected to be affected by the weaker growth outlook in several of Singapore’s key final demand markets, including China.
Further the ministry said the outbreak has led to a sharp fall in tourist arrivals, particularly from China, to Singapore and this has badly affected the tourism and transport sectors.
Retail and food services segments are also set to be adversely affected as domestic consumption in Singapore is likely to decline as locals reduce shopping and dining-out activities.
“Nonetheless, there are pockets of relative strength in the Singapore economy,” the ministry said.
These include the construction sector, which is projected to post steady growth given the rebound in construction demand since 2018, and the information & communications sector that is expected to be resilient on account of sustained enterprise demand for IT solutions.
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