Singapore's economic growth surged in the fourth quarter, rising 1.8 percent from a year earlier, handily beating a Reuters forecast for a rise of just 0.6 percent.

On a quarterly basis, gross domestic product (GDP) jumped 9.1 percent, official data showed on Tuesday, compared with a Reuters forecast for 3.7 percent growth. That was up from the third quarter's contraction of 1.9 percent on-quarter.

For the full year, Singapore's economy grew 1.8 percent, beating forecasts, but still the lowest since 2009, during the global financial crisis. The government had forecast 2016 GDP growth at 1.0-1.5 percent.

The Singapore dollar had a volatile reaction to the data, with the dollar fetching as much as 1.4518 Singapore dollars immediately after the release, before quickly retracing to around S$1.4492 at 8:09 a.m. HK/SIN, compared with around $1.4498 before the data.

Selena Ling, head of treasury research and strategy at OCBC, told CNBC's "Squawk Box" on Tuesday that the beat was due to strong manufacturing figures.

"Generally, we think that manufacturing is the tide that's lifting the boat now, because services is slowing down and construction is also softening," she said. "The November manufacturing numbers were already surprising on the upside, but I think this set of numbers does suggests that manufacturing is seeing a nice bounce."

The manufacturing sector grew 14.6 percent on-year in the fourth quarter, annualized and seasonally adjusted, compared with the third quarter's contraction of 8.1 percent on-quarter. Manufacturing expanded 6.5 percent on-year, primarily on the electronics and biomedical segments.

The services sector grew just 0.6 percent on-year in the fourth quarter, slightly up from the third quarter's 0.3 percent on-year increase.

But Ling didn't hold out much hope that Singapore's growth would strengthen much ahead.

"The domestic structural challenges are still there. We still have a high cost environment and I think the labor market is softening," she said. "We have seen the retrenchments as well as the net employment numbers come off a fair bit from the previous years, so I think the belt tightening for the households, it's ongoing. Even the employers are turning a little bit more cautious."

Redundancies in the first nine months of the year hit their highest since the first nine months of 2009, during the global financial crisis, government data in December showed.

Economists had turned more bearish on the city-state's economy recently. The December survey of professional forecasters, sent out in late November, by the city-state's central bank, the Monetary Authority of Singapore (MAS), found economists had cut their outlook for this year's growth to 1.4 percent from 1.8 percent in the September survey.

They expected Singapore's economy would grow just 1.5 percent in 2017 on average, down from the September survey's forecast for 1.8 percent and the June survey's projection of 2.1 percent. The latest forecasts for 2017 growth ranged from 0.7 percent to 2.3 percent. The December survey, which had 22 respondents, doesn't reflect the MAS' own forecasts.

Singapore's small, open economy has been buffeted by declines in global trade as well as its exposure to sharp drops in commodity prices.

The trade-dependent economy was also likely to be battered if U.S. President-elect Donald Trump actually fulfills his vows to pursue anti-trade measures, such as tariffs. Additionally, Trump's policies were widely expected to boost inflation and interest rates in the U.S., which would pressure financial conditions in the city-state.

OCBC's Ling said Trump was the main uncertainty for the city-state in 2017, particularly on global trade and China.

On the campaign trail, Trump repeatedly accused China of manipulating its currency in order to give its exports an advantage over U.S.-made goods, and he threatened to slap a tariff of up to 45 percent on Chinese imports.

"If you do get a tit-for-tat type of trade dispute between the U.S. and China, for instance, then that's going to have spillover effects on the rest of Asia," Ling said.

Singapore's Prime Minister Lee Hsien Loong appeared to allude to these issues in his New Year speech.

"The world around us is in flux. These are difficult and uncertain times," Lee said on Saturday.

"In developed countries, a mood of nativist nationalism has grown. There is profound angst and discontent with the impact of technology and globalization. People want to shut themselves off, to insulate themselves from foreign competition. This will most likely hurt themselves and fail to improve their lives."

Lee said that as a small country, Singapore couldn't close itself off and instead needed to reinvent itself to compete.

He noted that the government was working to help re-train workers and help industries transition for global developments.

Lee also noted that the Trans-Pacific Partnership (TPP) trade deal's prospects had "dimmed" -- Trump campaigned on a platform of killing the deal -- but the Singapore leader added that the city-state would pursue cooperation through other avenues, notable the Regional Comprehensive Economic Partnership (RCEP), which is a more China-centric regional trade deal, excluding the U.S.

But Lee did sound a note of caution, saying that economic growth was "still positive though less than we hoped for."

Among economists, Ling wasn't alone in being downbeat on the city-state's prospects for the year ahead.

"We do not expect the Singapore growth outlook to improve materially in 2017," Weiwen Ng, an economist for Southeast Asia at ANZ, said in a note on Tuesday, adding that the bank forecast 2017 growth at 1.4 percent, at the low end of the government's 1-3 percent forecast range.

"Prospects of a more protectionist trade policy would be negative for Singapore, [which] is wedded to the old export model and this will have knock on impact on domestic incomes. Consequently, domestic demand weakness should continue to weigh on an already subdued labor market," he said.

But he noted that the government was likely to step up fiscal measures in the upcoming budget, offering support to both households and companies.

Mizuho was even more pessimistic, calling the fourth-quarter GDP beat "hollow cheer" and an unsustainable "flash in the pan."

"Despite a bottoming expected at (still) weak levels in oil-related industries, the rest of the manufacturing remains tentative, depending to a large extent on China's fortunes and a potentially dampened demand from U.S. protectionism," Mizuho said in a note on Tuesday.

"Weakness in services, which contracted (quarter-on-quarter) from the first quarter through the third quarter, may prove difficult to shake off if rising global interest rates pressured the property sector further."

Singapore's gross domestic product (GDP) is the most important measure to evaluate the performance of Singapore's economy (Economic Growth, GDP). The Singapore Department of Statistics publishes GDP figures on a quarterly basis (GDP News). The table below shows the change of price-adjusted GDP for Singapore, typically referred to as Singapore's economic growth rate. A more complete assessment of Singapore's GDP can be found below.

Overview

Gross domestic product (GDP) measures the economic performance of a country over a given period, typically a year or a quarter. It is therefore the most important economic indicator to evaluate the country's economy (see our GDP page for more information on this indicator).

Singapore's GDP data (National Accounts, NA) are produced by Singapore Department of Statistics (DOS) based on the System of National Accounts (SNA2008).

Singapore GDP Growth Performance

In the 10 years before the great recession, from 1999 to 2007, Singapore's GDP grew 6.0% on average. Singapore's economy plummeted 0.6% in 2008; however, it managed to recover in 2010 and grew an impressive 15.2%. Since then, the economy has been on a sustainable growth track. Singapore's GDP grew 4.1% on average between 2011 and 2013.

Structure of Singapore's Gross Domestic Product

Singapore's economy has benefited from a high inflow of Foreign Direct Investment (FDI) due to its attractive investment environment. Singapore's strong economic success reflects its outward-oriented development strategy. The economy is highly dependent on exports, particularly in electronics and chemicals. Singapore relies on entrepôt trade. Thus, it imports raw goods and refines them for re-export. Some of the most important industries are water fabrication and oil refining.

The composition of Singapore's exports has changed over the years from labor-intense goods to high-value-added products. The impact of services in the economy has grown lately. Services account for around 75% of total GDP. The most important contributors to the services sector are banking and financial services, retail and transportation, among others. Manufacturing accounts for almost a quarter of total GDP and the industry is led by electronics, chemicals and biotechnology industries.

When are Singapore's GDP Data Released?

The Singapore Department of Statistics publishes GDP data on a quarterly basis. Two public releases are made for each reference quarter: the Advance Estimate and the Preliminary Estimate. The Advance Estimate is released no later than two weeks after the end of the reference quarter, while the Preliminary Estimate is made available to the public no later than eight weeks after the end of the reference quarter. The Preliminary Estimate is published in the Economic Survey of Singapore (ESS). The Economic Survey for the fourth quarter contains GDP data for the reference year. The press release of ESS is available on the website of Ministry of Trade and Industry, the Singapore Department of Statistics and the Singapore Press Centre.

A half-yearly-ahead advance release calendar is published on the Statistics Singapore website. The calendar is updated one week prior to the data release to show the precise release dates.

How are Singapore GDP figures computed?

The Advance Estimate publishes GDP figures calculated only with the production approach at constant 2010 prices. On the other hand, the Preliminary Estimate publishes GDP at current and constant prices calculated with the production approach, as well as expenditure-based GDP figures at constant 2010 prices.

The Singapore Department of Statistics adopts the year-on-year growth rates as its primary measure when it presents the GDP figures. However, the office also compiles and presents supplementary information on the quarter-on-quarter (qoq) growth rates and seasonally adjusted annualized rate (SAAR).

The production approach sums the gross value of output of various economic sectors net of the intermediate consumption—cost of goods and services used to produce the final output. The breakdown by the production approach shows output estimates for economic sectors such as manufacturing, construction, utilities, transportation and storage, finance and insurance, among others. The expenditure approach calculates GDP through the demand side. It estimates total production by calculating total expenditure of money. The breakdown by expenditure shows estimates for private consumption expenditure, government expenditure, gross fixed capital formation, changes in inventories and net exports of goods and services.

How Accurate are Singapore GDP Numbers?

The Advance Estimate includes GDP estimates that are largely computed from data for the first two months of the quarter. More comprehensive and detailed data are published in the Preliminary Estimate. When the Singapore DOS publishes the preliminary or advance estimates of quarterly GDP, it also revises the data from the previous quarter of the current year. Revisions of the annual GDP data are incorporated into the release of the fourth quarter EES each year. In addition, the office rebases the GDP data every few years.

Methodological changes are announced in advance in the Statistics Singapore Newsletter (SSN), which can be found on the DOS website.

Why are Singapore's GDP Data Important?

The Advance and Preliminary Estimates are made available to the Ministry of Trade and Industry for preparation of the press release 4 days and 10 days prior to public release, respectively. Key GDP aggregates are also made available to the ministry 3-5 days before release for preparation of revenue estimates for the government budget. The quarterly and annual ESS, contains policy statements that are important to provide an in-depth view on the state of Singapore's economy. Singapore is one of the region's most important economies; therefore, Singapore's GDP growth data have a notable impact in the market and are closely watched.

Where Can I Get Forecasts for Singapore's GDP?

Forecasts for Singapore's GDP growth are elaborated by many sources. The government, banks, consultancies, and think tanks watch Singapore's economy closely and regularly update their projections for Singapore GDP growth. FocusEconomics collects more than 20 different forecasts on Singapore's GDP and provides an average (Consensus Forecast) from the economists surveyed. Together with the minimum and the maximum projections for Singapore's GDP growth, you get a comprehensive overview on Singapore's future GDP growth projections.

Forecasts for Singapore's GDP growth are included in the monthly FocusEconomics Consensus Forecast for Singapore and the monthly FocusEconomics Consensus Forecast for Asia. All reports are available both on an ad-hoc basis and via an annual subscription (including optional Excel support). Download a free sample or purchase the report directly via our Online Store. The report is immediately available after the purchase.