If recent weaker-than-expected economic data from Singapore is anything to go by, the city-state is heading for a quarterly growth contraction, economists say.
A negative quarterly gross domestic product (GDP) reading for the third quarter should not be a surprise given an unusually firm annualized quarter-on-quarter rise of 15.5 percent in the second quarter, but the scale of the contraction is something to watch for, they add. The latest GDP data is expected later this month.
CIMB Regional Economist Seng Wun Song forecasts that Singapore's economy probably contracted 2-3 percent on a seasonally adjusted, quarter-on-quarter annualized basis in the third quarter. Hak Bin Chua, an economist at Bank of America Merrill Lynch (BoAML), is looking for a 4-5 percent contraction.
"It is a case of two steps forward, one step back for Singapore's economy," said CIMB's Song. "It's not that we are heading back down the hill, but the recovery is fragile."
And that's something the latest economic numbers highlight: data last week showed industrial production rose 3.5 percent on year in August, missing market expectations for a 4.9 percent rise.
On a monthly basis, output has declined for three months in a row, falling 1.4 percent in August.