SINGAPORE: Singapore's economy grew more slowly than forecast in the fourth quarter after the manufacturing sector shrank, adding to concerns that a trade dispute between the United States and China will drag on growth in 2019.
Rising trade protectionism and uncertainty over US-China relations are key risks for the city-state in the coming months although the impact from trade frictions have so far had only a limited impact on its small and open economy.
The trade-reliant economy grew 1.6% in the October-December period from the previous three months on an annualised and seasonally adjusted basis, the Ministry of Trade and Industry said in a statement, slower than expectations.
On a quarter-on-quarter seasonally-adjusted annualised basis, the manufacturing sector shrank 8.7%, reversing from 3.1% growth in the third quarter, data showed.
Gross domestic product was forecast to have expanded 3.2% in the fourth quarter from the previous three months, according to six economists surveyed by Reuters. The economy grew a revised 3.5% in the previous quarter.
From a year earlier, the economy grew 2.2% in the fourth quarter, compared with the median forecast of 2.3% in the Reuters survey and a revised 2.3% growth in the third quarter.
The economy expanded 3.3% for all of 2018, slowing from a three-year high of 3.6% the prior year. The government's forecast for 2018 growth had been 3.0 to 3.5%.
Singapore is considered a bellwether for global growth because international trade - equating to about 200% of its GDP - dwarfs its domestic economy.
Some economists have said that while growth is expected to slow in 2019, it may still expand at a sufficiently robust pace to justify more tightening by the Monetary Authority of Singapore.
However, a significant deterioration in the growth outlook will increase the odds for the central bank to stay on hold in April when it makes its next decision.
The government has a wide range for 2019's GDP growth forecast of 1.5 to 3.5%.
