Singapore economy expected to grow by ＂close to 2.0 percent＂ in 2015

Singapore's Ministry of Trade and Industry announced on Wednesday the country's economy grew by 1.9 percent year-on-year in the third quarter of 2015, and expects the economy to grow by "close to 2.0 percent" for the whole of 2015.

The figure for the third quarter is marginally lower than the 2 percent growth in the previous quarter, said the ministry. On a quarter-on-quarter seasonally-adjusted annualized basis, the economy expanded by 1.9 percent, a reversal from the 2.6 percent contraction in the second quarter.

In line with the sluggish external environment, Singapore's economy grew at a slower pace of 2.2 percent in the first three quarters of 2015, compared to 3.2 percent over the same period a year ago. The ministry said growth was weighed down primarily by the weak performance of the manufacturing sector.

For the rest of the year, Singapore's GDP growth is expected to remain resilient amidst a challenging external environment. Sectors such as wholesale trade and finance and insurance are likely to continue to post modest growth, even as the manufacturing sector is expected to remain weak.

On the other hand, growth in domestically-oriented sectors like business services and information and communications is likely to remain firm. Taking these factors into consideration, the ministry expected that Singapore's economy would grow by "close to 2.0 percent" for the whole of 2015.

As for the growth in 2016, the ministry expected the economy to grow at a modest pace of "1 percent to 3 percent." The ministry said the continued slowdown in the Chinese economy, the services-driven nature of growth in the U.S. as well as the trends of in-sourcing in China and the U.S. may mean that external demand for Singapore and regional countries may not see a significant uplift next year.

Domestically, labor market is also expected to be tight, with the unemployment rate remaining low, it said. The authority also pointed out that sectors such as finance and insurance and wholesale trade are expected to support growth while the manufacturing sector is likely to remain weak.