SINGAPORE, Oct 13, 2023 (BSS/AFP) - Singapore's economy grew faster than expected in the third quarter, preliminary government estimates showed Friday, as construction and services made up for a continued slump in manufacturing.

Gross domestic product expanded 0.7 percent year-on-year in the three months ending September, beating forecasts of around 0.4 percent, and extending the 0.5 percent growth in the previous quarter, the trade ministry said.

Construction and services expanded 6.0 percent and 1.9 percent year-on-year, respectively, offsetting a 5.0 percent contraction in manufacturing, extending its decline since the first quarter, according to the data.

Manufacturing covers the semiconductor sector, which is heavily dependent on global demand.

Singapore's economic performance is often seen as a barometer of the global environment because of its reliance on international trade.

Also on Friday, the central bank said it was keeping monetary policy unchanged as core inflation eases.

The Monetary Authority of Singapore (MAS) said in its half-yearly statement it will maintain the band at which the Singapore dollar is allowed to move.

Singapore uses the exchange rate instead of interest rates to tackle inflation as it imports most of its needs. A stronger local dollar makes imported goods cheaper.

"Global economic activity has moderated reflecting weaker growth in the eurozone and China, even as the US economy has thus far been resilient," the MAS said.

"In the near term, global final demand is expected to soften amid elevated interest rates," it said, adding however that "the risk of a sharp global downturn... has receded compared to earlier in the year".

The MAS also said that from next year, it will make monetary policy statements on a quarterly basis instead of just twice a year as part of "continuing efforts to enhance monetary policy communications".

Singapore in August cut its economic growth forecast this year to 0.5-1.5 percent from a previous estimate of 0.5-2.5 percent.