SGD Soars Following Q3 GDP Growth
• SGD/USD Rallies Following Optimistic GDP Figures
• Projected GDP Growth Between 2 to 4 Percent For 2015
The USD/SGD rallied to new heights as news surrounding GDP growth and expectations from the Ministry of Trade and Industry crossed the wire. The Singapore economy expanded by 2.8 percent in the third quarter of this year, up from 2.4 percent a year ago, beating analysts’ expectations of 2.5 percent, according to Ministry of Trade and Industry in their November 25, 2014 press release. On a quarter-on-quarter seasonally adjusted basis, economic growth again beat leading economists’ expectations of 1.5 percent expanding to 3.1 percent, up from 1.2 percent last quarter.
Policymakers argued that these figures primarily stem from growth in Singapore’s manufacturing sector as well as a slow healing global economy. The Singapore manufacturing sector rallied by 1.9 percent year-on-year, a slight improvement from the 1.5 percent growth last quarter, with the growth supported by the biomedical industry. On a quarter-on-quarter seasonally adjusted basis, this sector expanded by 2.8 percent, reversing a 14.9 percent decline in the previous quarter. Despite a slight contraction in the construction sector of 1.7 percent year-on-year as compared to 3.7 percent in the preceding quarter, the wholesale and retail trade sector grew by 2 percent year-on-year, outpacing 1.8 percent in the previous quarter. The finance and Insurance sector charged forward to 10.5 percent year-on-year from 5.5 percent in the preceding quarter. According to the Ministry of Trade and Industry growth in this sector was caused by an increase in “financial intermediation and insurance segmentation.” Similarly, the business services industry accelerated forward by 3.4 percent year-on-year compared to 2.4 percent last quarter.
The Ministry of Trade and Industry reported that the Singapore economy as a whole expanded by 3.3 percent on a year-on-year basis, however expected growth is around 3.0 percent for the remainder of 2014. In line with an expected recovery in the US and Eurozone economies in 2015, policymakers projected GDP growth of 2 to 4 percent in 2015, spurred by further expected growth in sectors such as manufacturing, wholesale trade, and finance and insurance.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.