Singapore: Q3 GDP falls 1.5% over Q2; Technical recession avoided

[arthur]

Its all over the news since morning.
But many in other forums are scratching their heads over the revision of 2nd GDP QoQ being changed from -0.7% to +0.2%.

Did we employ the same guys who complie and report US jobless claims numbers every forthnight, only to have them revised upwards at the subsequent weeks?

Someone tells me I should trust the figures?


Singapore's economy contracted 1.5 per cent over the third quarter largely due to a fall in electronics output. This was worse than the 1 per cent quarter-on-quarter drop in GDP economists were expecting.

But GDP for the second quarter - earlier estimated to have shrunk 0.7 per cent quarter-on-quarter on a seasonally-adjusted annualised basis - was revised up into growth territory. The economy grew 0.2 per cent quarter-on-quarter.

With that, Singapore has avoided a technical recession yet again. Economists had been close to certain that Singapore fell into recession in Q3, after poor exports and production performance figures. But earlier this week, Prime Minister Lee Hsien Loong hinted otherwise, saying that Q2 figures may have come in better than earlier estimated.

Flash estimates for Q3 released on Friday morning show that Q3 GDP rose 1.3 per cent from a year ago, slightly better than the 1.2 per cent median growth forecast of 16 economists polled by Reuters. This followed a revised year-on-year growth of 2.3 per cent in Q2.

The Ministry of Trade and Industry has stuck to its growth forecast of 1.5 to 2.5 per cent in 2012, which it narrowed from 1 to 3 per cent in August.

http://www.businesstimes.com.sg/breaking...d-20121012

[corydorus]

In my company there is something call "Channel Stuffing". With so many GLC, can this be coordinated at wider scale to drive GDP ?
Maybe selling property from Left to Right ?

[Musicwhiz]

Hey I mean let's face it - being an economist is one of the only jobs where you can make guesses most of the time, get stuff wrong without losing your job, and constantly revise historical figures. Perfect job!

[KopiKat]

Hey I mean let's face it - being an economist is one of the only jobs where you can make guesses most of the time, get stuff wrong without losing your job, and constantly revise historical figures. Perfect job!

Stocks Analysts is another. You can make a BUY call and after weeks / months of falling share price, you can re-write another story on why it's been re-rated to a HOLD or SELL...

[AlphaQuant]

what is interesting is MAS decision on the usdsgd. in a surprising move, MAS retained the policy despite many looking for a lowering of the gradient of appreciation. many had also expected a tightening of the width with the perceived reduced volatility now that the Fed/ECB had removed the tailrisk of a systematic failure.

clearly MAS is more worried abt the effects of the QE on asset bubbles in singapore and the subsequent bust, than the loss of competitiveness to the exporters of a higher domestic ccy especially in view of the weak GDP numbers. mutedly it is probably not tightening the width in anticipation of uncertainty ahead.

whether it is a technical recession or not, does not really matter - global headwinds are strong, growth will be weak but the outfalls from an asset bubble is more important.

[Muck]

Hey I mean let's face it - being an economist is one of the only jobs where you can make guesses most of the time, get stuff wrong without losing your job, and constantly revise historical figures. Perfect job!

That, and weather forecasting too

Btw, technical or not doesn't matter, I believe we're still heading into a slump within the next year or two.

[kazukirai]

Someone tells me I should trust the figures?

GDP revisions are commonplace- not just in SG but even in the US. They have a methodology for measuring GDP, otherwise, many people should be up in arms over what those folks at MTI are being paid for.

Anyway, as an investor, I wouldn't be too concerned over GDP figures. In general, the market leads the economy so by the time GDP figures are revised for the last quarter, the information is essentially useless to an investor. For those keen on digging up more, I've actually seen an MAS publication where they have a model which predicts how the economy will be and guess what, stock market returns are used as a predictor of how the economy will do and not the other way around.

There is also literature out there where studies have been done that shows that GDP has almost no correlation with stock market returns.

In summary, should I be concerned about GDP figures? If I'm a technocrat then the answer is Yes. As an long-term investor, despite what the newspapers and so-called experts say, hell no. GDP figures are much more useless than measures of earnings and cashflow.

[brattzz]

believe the message is "technical recession avoided" here.. for the Q3...
given the slowdown... Q4, Q1... pending numbers..

[ken]

Recession ?
The STI Index is up about 14%.
Those invested should be better off than begining of this year.
Cheers !