Economists expect slower growth for Singapore economy in Q3

Singapore's economic growth in the third quarter is expected to be slower, a local daily newspaper reported on Thursday, citing local economists. The consensus among economists is that the gross domestic product in the third quarter is expected to expand by 3.8 percent year on year, the Straits Times said. This is the same as the growth of 3.8 percent in the second quarter. However, in quarter-on-quarter terms, some of the economists expect a pullback, in comparison with the 15.5 percent growth for the second quarter. Nevertheless, the economists said that the numbers in the second and third quarters indicated that the economy is now on a more stable footing. OCBC economist Selena Ling agreed, noting that indicators from economies around the world are improving, with Europe gradually emerging from recession and Japan getting some lift from " Abenomics". "The recovery story is still uneven but there is some light at the end of the tunnel," she said. Ling said she expects a 2.3 percent growth year on year in the third quarter. "We are hopeful that manufacturing will continue to pick up steam despite the recent disappointing numbers," she said. Singapore's manufacturing output in August rose 3.5 percent year on year, slightly weaker than market expectations, mainly due to a weaker pharmaceuticals sector. UOB economist Francis Tan said the services sector continued to prop up economic growth in the third quarter. Manufacturing accounts for around 20 percent of the Singapore economy. The ongoing U.S. government shutdown and uncertainties over the country's looming debt ceiling might throw a spanner in the gradual pick-up in this quarter, CIMB economist Song Seng Wun said. "The issues in Washington will have an impact on business and consumer confidence," he was quoted as saying. Indicators suggest a rebound in the fourth quarter for both the manufacturing and services sectors, but that assumption could now be at risk, Song said. "We could see a technical recession in the fourth quarter if the external environment takes a turn for the worse," he said.