Green shoots for Singapore economy

Advance estimates released by the Ministry of Trade and Industry (MTI) on April 14 showed that the Singapore economy grew by 0.2 per cent on a year-on-year basis in the first quarter of 2021, a turnaround from the 2.4 per cent contraction recorded in the previous quarter.

The manufacturing sector was the best performer, posting year-on-year growth of 7.5 per cent, better than the 7.3 per cent expansion it saw in the whole of 2020. This growth was aided by output expansions in electronics, precision engineering, chemicals and biomedical manufacturing. Construction, though it shrank 20.2 per cent, was slightly better than the 27.4 per cent contraction it suffered in the fourth quarter and the 35.9 per cent decline in the whole of 2020. Similarly, the services industry, posting a contraction of 1.2 per cent year on year, performed better than in the fourth quarter when it sank by 4.7 per cent and the decline of 6.9 per cent in full-year 2020.

Among the services sectors, the wholesale & retail trade and transportation & storage sectors shrank by 4.1 per cent in the first quarter, moderating from the 6.4 per cent contraction in the previous quarter. Meanwhile, the information & communications, finance & insurance and professional services sectors collectively grew by 3.7 per cent in the first quarter, faster than the 1.4 per cent expansion in the preceding quarter.

MTI has maintained its November forecast of the economy growing by 4 per cent to 6 per cent this year. The Monetary Authority of Singapore (MAS) said in its biannual review that "Singapore's GDP growth this year is likely to exceed the upper end of the official 4-6 per cent forecast range, barring a setback to the global economy". Still the central bank noted that significant uncertainties remain, including the possibility of further virus mutations and premature relaxation of social restrictions by governments, which could derail the global and domestic recovery.