Singapore's 2016 growth seen at 1-3%

Singapore's final Q3 GDP was an upward revision from the advance estimate of 1.4%, which came at 1.9%, driven by the solid services sector. In third quarter, the construction sector was slower last quarter, but the main pullback for the economy is the manufacturing sector.

The weakness mainly comes from the electronics sector, which is a great concern. October IP might see a sharp slippage, as indicated by this.

Growth was revised up, on a qoq basis, to 1.9% seasonally-adjusted compared to 0.1% original and partially reversed the -2.6% in second quarter, which highlights Singapore GDP's volatile nature, even on a seasonally adjusted basis.

The government expects 2015 growth to come in "close to 2%". Given 2.2% growth in the first three quarters of the year, this implies a moderation in Q4 to around 1.7%. 

For 2016, the government is projecting 1-3% vs preliminary estimates over the past two years of 2-4%, implying a continued downshift in growth. 

According to Commerzbank, more than anything, this reflects 
The sluggish global growth recovery; and 

The continued drop in potential growth for the economy due to a host of factors, including demographics, maturing economy, and hollowing out of the electronics sector on rising costs.