SINGAPORE (REUTERS) – Singapore’s economy is expected to have grown 0.9 per cent in the first quarter on a year-on-year basis, an improvement from earlier estimates, due to stronger-than-expected performance in the manufacturing sector, according to a Reuters poll of economists.
That compares with a 0.2 per cent rise in gross domestic product in the Government’s advance estimates.
Singapore’s central bank expects economic growth to exceed the upper end of the official 4-6 per cent forecast range, recovering from the recession induced by the COVID-19 pandemic in 2020, its worst on record.
“The significant upgrade takes into account the March industrial production performance… and we think there is more upside from trade-related services sectors,” said Mr Alex Loo, macro strategist at TD Securities.
This year’s GDP growth will continue to be driven by the manufacturing and trade-related services sectors, he said.
The city-state is often seen as a bellwether for global growth as international trade dwarfs its domestic economy.
Industrial production in April is forecast by economists to expand 3.4 per cent on year, the sixth straight month of increase and following a better-than-expected 7.6 per cent rise in March. The latest data is due on Tuesday (May 25).
The central bank is widely expected to maintain its accommodative stance when it meets for the second of its semi-annual policy announcements in October.
“We are hopeful of recovery in the global demand continuing to support the export-led recovery in Singapore’s economy over the rest of the year,” said Mr Prakash Sakpal, ING’s senior economist for Asia.
However, the economy faces uncertainties due to the global and local coronavirus outbreak situation.
Singapore this month re-imposed some restrictions on social gatherings, the toughest since exiting a lockdown last year, to combat a recent spike in local Covid-19 infections.
Economists said further curbs will add to weakness in the services, tourism and construction sectors.
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