Singapore's economy just recorded its best growth quarter in three years

Photo by Suhaimi Abdullah/Getty Images

Singaporean economic growth surged in the final three months of 2016, according to advanced estimates released by the government on Tuesday.

The Ministry of Trade and Industry (MTI) said that GDP grew by 9.1% on a seasonally adjusted annualised basis, the fastest pace seen since the June quarter of 2013.

The increase, well above the 3.7% gain expected by economists, saw GDP grow by 1.8% from the same quarter in 2015.

It too was above the 0.6% pace expected, but was still the slowest annual increase reported since 2009.

Despite the slowdown, the figure was above the MTI’s earlier forecast for growth of 1 to 1.5%.

Source: Singapore Ministry of Trade and Industry

The government said that the nation’s manufacturing and services industries grew at a seasonally adjusted annual rate (SAAR) of 14.6% and 9.4% respectively, helping to offset a 4.7% contraction in the construction sector.

In year-on-year terms, the manufacturing sector grew by 6.5%, a stark turnaround from the 8.1% contraction reported in the previous quarter.

Growth in services producing industries came in at 0.6% from the same quarter a year earlier, an improvement on the 0.3% expansion seen in the 12 months to September.

Mirroring the quarterly performance, construction was the only sector to register a decline from a year earlier, contracting 2.8%. This was a sharper fall than the 0.2% pace registered in the year to September.

The MTI said that it will release preliminary GDP estimates for both the fourth quarter and calendar year 2016, along with sources of growth, inflation, employment and productivity, in its economic survey of Singapore that will be released in February.

While Singaporean GDP has a tendency to be volatile, and often prone to significant revisions in either direction, the sharp acceleration in economic activity is just the latest in a growing list of data points — including from the US and China — that suggests the global economy was strengthening heading into 2017.

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