Singapore upgrades third-quarter GDP, sees economy returning to growth next year

SINGAPORE: Singapore’s economy contracted much less than initially estimated in the third quarter due to gradual easing of COVID-19 lockdown measures and authorities expect the city-state to bounce back to growth next year from its worst recession.

Gross domestic product (GDP) fell 5.8% year-on-year in the third quarter, the ministry of trade and industry said on Monday, versus the 7% drop seen in the government’s advance estimate.

Analysts expected a 5.4% contraction, according to the median of 10 forecasts.

The government said it now expects full-year GDP to contract between 6.5% and 6% versus its prior forecast for a 5% to 7% decline. The country is still facing the biggest downturn in its history.

The economy is expected to grow 4% to 6% next year.

“The recovery of the Singapore economy in the year ahead is expected to be gradual, and will depend to a large extent on how the global economy performs and whether Singapore is able to continue to keep the domestic COVID-19 situation under control,” the MTI said in a statement.

The economy grew 9.2% from the previous three months on a seasonally adjusted basis, compared with the 13.2% contraction in the second quarter. The bounce marked the end of a “technical recession”, as it followed two preceding quarterly contractions.