SINGAPORE – Singapore maintained its economic growth forecast range for this year at 4 per cent to 6 per cent, despite increased uncertainty over the economic conditions, the Ministry of Trade and Industry (MTI) said on Tuesday (May 25).<\/p>\n
The forecast will be reviewed again in August, when there is more data, and greater clarity over the global and domestic economic situations, MTI said in a statement.<\/p>\n
MTI said uncertainties have increased and are characterised by both upside and downside risks, especially arising from the coronavirus pandemic at home and abroad.<\/p>\n
Singapore reimposed earlier in May most of the strict circuit breaker measures from last year to contain a surprise surge in local community Covid-19 cases. The lockdown that will remain in effect until mid June has raised concerns over the full-year growth target.<\/p>\n
“Since February, the external economic environment has improved, even though the pandemic continues to disrupt activities in many economies and threatens to undermine any recovery,” it said.<\/p>\n
“While the recent tightening of domestic restrictions and border controls represents a setback to segments of the economy, the broader economy should still see a recovery this year in tandem with the global economic rebound and further progress in the domestic vaccination programme.”<\/p>\n
The performance of the economy in the first quarter of 2021 was stronger than expected.<\/p>\n
The final estimate for first-quarter growth came at 1.3 per cent on a yearly basis, compared to an earlier estimate of 0.2 per cent and the 2.4 per cent contraction in the previous quarter.<\/p>\n
The January-March growth was even higher than the 0.9 per cent growth projected by economists in a Reuters poll.<\/p>\n
On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 3.1 per cent, extending the 3.8 per cent expansion in the fourth quarter of last year.<\/p>\n
The first quarter growth came on the back of the manufacturing sector’s 10.7 per cent year-on-year expansion, faster than the 10.3 per cent growth recorded in the previous quarter.<\/p>\n
MTI said the Jan-March growth was due to output expansions in the electronics, precision engineering and chemicals clusters, which outweighed output declines in transport engineering, general manufacturing and biomedical manufacturing.<\/p>\n
The wholesale trade sector expanded by 3.5 per cent year-on-year, faster than the 1.8 per cent growth registered in the previous quarter, and the retail trade sector grew by 1.4 per cent.<\/p>\n
Growth of the information & communications sector accelerated to 6.4 per cent year-on-year, from the 2.6 per cent achieved in the previous quarter.<\/p>\n
However, the construction sector contracted by 22.7 per cent and the transportation and storage sector shrank by 16.5 per cent, compared with the same period last year. The food & beverage services sector contracted by 9.4 per cent year-on-year.<\/p>\n
MTI said that it is still possible that the Singapore economy will outperform the 4-6 per cent growth forecast for 2021, there are also significant downside risks, with the most important being the trajectory of the pandemic.<\/p>\n
“Countries are experiencing recurring waves of infections, with the emergence of more transmissible strains of the virus, the easing of safe management restrictions, and delays in vaccinating populations.”<\/p>\n
The ministry said these resurgences, as well as the countries’ public health responses to them, will inevitably affect their economic growth.<\/p>\n
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