Singapore's Q4 and 2021 GDP Deal Positive Surprise to Markets - FX Leaders - FX Leaders
Positive news coming in for the Singapore economy as the first trading week of 2022 gets underway, with its Q4 GDP coming in stronger than expected. Preliminary data released earlier today reveals that the Singapore economy grew by 5.9% YoY during the last quarter of 2021, a far higher growth than economists’ expectations for a reading of 5.4% instead.
On a quarterly basis, Singapore’s Q4 GDP came in at +2.6% QoQ seasonally adjusted. This growth is a positive sign, despite worries that the Omicron variant and fresh restrictions hit consumer sentiment across the island nation.
Singapore’s economy has posted a 7.2% growth for 2021, rebounding from the COVID-19 pandemic inflicted downturn quite well through the year. The GDP for 2021 was the highest seen since 2010 and has come in better than the government’s official estimate for a 7% growth in the year.
For 2022, however, the government expects the GDP to ease lower to 3-5% as the economy stabilizes following the coronavirus crisis. Although Singapore boasts a high rate of vaccination among its population, the discovery of new strains of the virus are likely to cloud the outlook into 2022, driving uncertainties in its economy.
Impact on the Singapore Dollar
Following the release of the GDP data, the Singapore dollar saw some bullish moves against the US dollar as markets cheered the better than expected performance of the economy. The USD/SGD currency pair did see a period of bearishness shortly after the data was out but it has bounced back higher since then.
At the time of writing, USD/SGD is trading at around $1.351. The currency pair is somewhat bullish at the moment as the US dollar enjoys support amid thin liquidity in forex markets on Monday.