The Ministry of Trade and Industry of Singapore recently released economic survey data showing that Singapore's economic growth significantly accelerated in the third quarter of this year, with a preliminary estimate of a 4.1% year-on-year increase in Gross Domestic Product (GDP), higher than the 2.9% increase in the second quarter. After seasonal adjustment, the GDP increased by 2.1% quarter-on-quarter in the third quarter, higher than the 0.4% increase in the second quarter.

Singapore's manufacturing output value increased by 7.5% year-on-year in the third quarter, significantly rebounding and reversing the 1.1% decrease in the second quarter, which was one of the main reasons for the rapid economic growth in the third quarter. Except for the biomedical manufacturing industry, the output value of other manufacturing sectors all achieved year-on-year growth. After seasonal adjustment, the manufacturing output value increased by 9.9% quarter-on-quarter in the third quarter, compared to a 1.2% decrease in the second quarter.

Market analysis believes that the increase in external demand, the continuous recovery of orders, production, and exports in the electronics industry are the main reasons for the increase in manufacturing output value. The output value of the electronics industry, which accounts for the largest weight in manufacturing output, increased by 2.8% year-on-year in July, reversing the 6.7% decrease in June. Among them, the output value of computer accessories and data storage increased by 34.9%. In August, the electronics industry increased by 49.1% year-on-year, far higher than the 2.8% increase in July. Among them, the output value of semiconductors increased by 54.6%. Driven by the strong electronics industry, in July, the manufacturing output value rebounded strongly, increasing by 1.8% year-on-year, reversing the 4.3% decrease in June, and exceeding market expectations. In August, the manufacturing output value increased by 21% year-on-year, far higher than the 1.8% increase in July, and exceeded the market expectation of 8.9%, which was also the fastest growth in manufacturing output value since mid-2021.

Some analysts pointed out that thanks to the recovery of global demand, the recovery momentum of Singapore's electronics industry is obvious, and the growth is expected to continue into the fourth quarter of this year or the first quarter of next year. With the continuous recovery of the electronics industry and the steady growth of external demand, Singapore's manufacturing output value will continue to grow in the next few months, and the annual growth rate is expected to exceed 1.5%.

The Institute of Purchasing and Logistics Management of Singapore recently released data showing that Singapore's manufacturing Purchasing Managers' Index (PMI) increased by 0.1 points to 51.0 in September, which is the 13th consecutive month that the index has remained in the expansion range and has reached the highest value since July 2021. DBS Bank economist Chai Han Ting pointed out that compared with other regional export countries, Singapore's PMI performance is relatively strong, indicating that the outlook for Singapore's manufacturing industry is relatively optimistic for the rest of 2024.

In addition, the non-oil domestic export output value stopped falling and rebounded strongly, which is also an important reason for the rapid economic growth in Singapore in the third quarter. In July, the non-oil domestic export output value ended the decline for five consecutive months, rebounded strongly and increased by 15.7%, exceeding market expectations, reversing the 8.8% decrease in output value in June, and achieving the first expansion of output value since January this year. In August, the non-oil domestic export output value increased by 10.7%, lower than the increase in July, and also lower than market expectations. In September, the non-oil domestic export output value continued to rise, but the growth rate slowed down, with only a 2.7% year-on-year increase, lower than the growth rate in August. The non-oil domestic export output value has achieved positive growth for three consecutive months.

However, Singapore's service industry output value increased by 3.3% year-on-year in the third quarter, slower than the growth rate in the first and second quarters of this year. The output value of the wholesale and retail industry, transportation and warehousing industry is estimated to increase by 3.5% year-on-year, slower than the 3.9% growth in the second quarter. The construction industry output value increased by 3.1% year-on-year, also slower than the 4.8% growth in the second quarter. The information and communication, finance and insurance, and professional service industries are estimated to increase by 4.3% year-on-year, lower than the growth rate in the second quarter. The accommodation and catering services, real estate, and other service industries such as administration are estimated to increase by 1.0% year-on-year, the same as in the second quarter.

As of October 17, the quarterly GDP growth data announced by the Singapore government department are: a 3.0% increase in the first quarter, a 2.9% increase in the second quarter, and a 4.1% increase in the third quarter. Considering the impact of various domestic and foreign factors on economic growth, if there are no major accidents in the fourth quarter, there is a high possibility that Singapore's annual GDP growth will exceed 3%.

Due to the better-than-expected economic performance of Singapore in the first three quarters of this year, and an average growth of 3.3% in the first three quarters, coupled with the expectation that robust external demand will continue to drive the growth of manufacturing output value, some economic analysts have raised their forecast for Singapore's annual economic growth from the previous 3% to 3.5%, higher than the Ministry of Trade and Industry's forecast of a 2% to 3% growth rate for the year.

The Monetary Authority of Singapore recently stated that Singapore's economic growth momentum is increasing, and it is expected that the actual growth will further return to the potential level in the second half of 2024, unless global terminal demand shrinks, Singapore's economy will maintain steady growth and approach the potential growth level in 2025.However, it is also important to recognize that ongoing geopolitical conflicts, an increasingly complex and volatile global economic environment, uncertainty in external consumer demand, fluctuations in domestic manufacturing and non-oil product exports, rising production and operational costs for businesses, and persistently high living costs for residents may continue to add uncertainty to Singapore's economic growth prospects.