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RPT-PREVIEW-Singapore likely in recession on expected Q3 GDP drop

(Repeats story issued on Friday, no changes to text)

* WHAT: Advance Q3 GDP data

* WHEN: 8:00 am (0000 GMT), Friday, Oct 12

* FORECAST: -1.8 pct q/q saar, +1.0 pct y/y

SINGAPORE, Oct 5 (Reuters) - Singapore's economy probably contracted further in the third quarter because of poor demand for its manufacturing exports, tipping the island into a recession and reinforcing expectations of policy easing by the central bank at its meeting next Friday.

Gross domestic product likely shrank by 1.8 percent in July-September, worsening from the 0.7 percent quarter-on-quarter seasonally adjusted and annualised drop in April-June, according to a median estimate of 12 economists polled by Reuters.

From a year ago, the economy probably grew by 1.0 percent, slower than the second quarter's 2.0 percent expansion, reflecting the impact of the slowdown in the big export markets of Europe, United States and China on the trade-reliant city-state.

Advance estimates for third quarter gross domestic product will be released at 8:00 a.m. local time (0000 GMT) on Friday, at the same time the Monetary Authority of Singapore (MAS) issues its half-year monetary policy statement.

The central bank is expected to ease monetary policy by slowing the Singapore dollar's pace of appreciation to help manufacturers fight the weakness abroad. The local unit has gained 5.6 percent this year, making the country's exports costlier.

Bank of America Merrill Lynch's Southeast Asian economist Chua Hak Bin said in a note that the downturn in Singapore appeared mild and was "largely a manufacturing recession".

Construction likely remained healthy in the third quarter while services growth was slightly positive, he added.

Singapore's manufacturing sector contracted for a third consecutive month in September as new orders fell further, the country's Purchasing Managers' index (PMI) showed, in line with other export-driven Asian economies facing tepid demand in Europe and the United States.

The drop in the September PMI reading followed weak manufacturing and exports data for July and August that were worse than expected.

DOMESTIC FACTORS

DBS, Southeast Asia's largest banking group, said that domestic factors had added to Singapore's loss of competitiveness.

"High COE premiums and rentals, as well as the continued increase in labour cost are the key drivers," DBS economist Irvin Seah said in a note.

COEs refer to the certificates of entitlement that individuals and companies need to bid for before they can buy a motor vehicle in Singapore, and are used by authorities to cap the number of vehicles on the road.

According to COE prices tracked by sgcarmart.com, the cost of a certificate for goods vehicles and buses has jumped 45 percent since the start of the year to S$56,001 ($45,600), up from S$38,699 in early January.

Singapore has also been making it harder for companies to employ low-cost foreign workers as its previously lax immigration policy has caused wages at the low end to stagnate.

The government is also facing a backlash by citizens over the large number of foreigners in the country that has resulted in crowded trains and buses as well as competition for jobs and housing.

"The tightening in foreign labour inflow in particular, is creating significant strain on enterprises and eroding Singapore's cost competitiveness," Seah said.

Foreigners now account for 40 percent of the city-state's 5.3 million population.

Q3/2012 Median Range Q2/2012 No. of (% change) (actual) estimates Q/Q SAAR* -1.8 -7.0/-0.1 -0.7 12 YOY** +1.0 -0.5/+1.0 +2.0 12

* Seasonally adjusted annualised rate based on quarterly change ** percentage change from a year ago

INDIVIDUAL ESTIMATES: q/q saar y/y Barclays -5.5 0.1 Bank of America Merrill Lynch -1.7 1.1 CIMB -2.0 0.9 Citigroup -1.8 0.8 Credit Suisse -4.4 0.3 DBS -0.1 2.3 ING Financial Markets -3.5 0.6 Macquarie -7.0 -0.5 Maybank -1.0 1.5 OCBC -0.3 1.4 Standard Chartered -0.4 1.4 United Overseas Bank Ltd -0.4 1.2

($1 = 1.2287 Singapore dollars)

(Reporting by Kevin Lim; Editing by Sanjeev Miglani)

((Kevin.Lim@thomsonreuters.com)(65)(6403 5663))

Keywords: SINGAPORE ECONOMY/GDP