Singapore’s close shave with recession

Singapore has been spared a widely feared recession. The government yesterday reported the economy grew 1.8 per cent in the fourth quarter of 2012 compared with the third quarter, when the gross domestic product shrank 6.3 per cent. But look how narrowly Singapore averted a recession in the third quarter. The revised estimates put out by the ministry show the economy grew 0,2 per cent, and not 0.5 per cent in the second quarter as previously reported. Two straight quarters of negative growth would have meant the economy was in recession.

2012 Q1 Q2 Q3 Q4
GDP (quarter on quarter) 9.5 0.2 -6.3 1.8

Actually, the ministry initially reported the economy contracted 0.7 per cent in the second quarter compared with the first quarter. The ministry said so in this press release dated August 10, 2012.

Singapore economy second quarter press release August 2012

Later, however, the ministry reported the economy had grown, not shrunk, in the second quarter. The gross domestic product had risen by 0.5 per cent in the second quarter, the ministry said in this press release dated November 16, 2012, giving the third quarter figures.

Singapore economy third quarter press release November 2012

Now the fourth quarter advance estimates given by the ministry yesterday show the economy grew 0.2 per cent, not 0.5 per cent, in the second quarter.

Economic data are always subject to revisions. As the ministry made it clear, the fourth quarter figures released yesterday are only advance estimates based on market data for October and November 2012. The December data will be included in the full report in February. So changes in the fourth quarter report are also likely.

Here are the figures given by the ministry yesterday side by side with the data it presented in the third quarter in November 2012. See the changes. That is one reason why Singapore averted a recession in the fourth quarter, said analysts. “The surprise growth in G.D.P. during the fourth quarter was primarily the result of downward revisions to data for the first nine months of 2012,” reported Reuters. The other reason was the growth in services, which account for two-thirds of Singapore’s gross domestic product, as I mentioned in my post yesterday.

All the figures below show by what per cent each sector grew or shrank from one quarter to the next. The figures in blue are taken from the third quarter report released in November and those in red from the fourth quarter advance estimates issued yesterday.

2012 Q1 Q2 Q3 Q4
Total GDP (Q 3 report) 10.1 0.5 -5.9
Total GDP(Q4 report) 9.5 0.2 -6.3 1.8
Goods-producing industries (Q3 report) 22.9 2.1 -10.2
Goods-producing industries (Q4 report) NA NA NA NA
Manufacturing (Q3 report) 20.9 0 -9.6
Manufacturing (Q4 report) 18,4 -0.8 -9.9 -10.8
Construction (Q3 report) 40.1 19,4 -17.2
Construction (Q4 report) 41.6 18.1 -17.4 -8.9
Services-producing industries (Q3 report) 3.2 -0.1 -3.5
Services-producing industries (Q4 report) 3.2 -0.1 -3.9 7