Economic growth edged down to +2.2% y/y in Q4 2018 (after +2.3% y/y in Q3) according to advance estimates. The manufacturing sector posted a growth acceleration to +5.5% y/y (after +3.7%), services activity growth slowed to +1.9% y/y (after +2.6%) and construction continued to contract but at a slower pace (-2.2% y/y after -2.5%). While the expenditures breakdown has not been communicated yet, there are signs that the slowdown was due to a weaker expansion in exports: SGD-denominated non-oil domestic exports contracted in November (-2.6% y/y after +8.2% in October). Overall, real GDP rose by +3.3% in 2018 (after +3.6% in 2017). Advanced indicators point to weaker growth ahead. The SIPMM Manufacturing PMI softened to 51.1 points in December (from 51.5 in November) with slower expansion in new export orders. In that context, we expect real GDP growth to decelerate to +2.4% in 2019.
