SINGAPORE (ICIS)--Singapore's economy grew by 0.2% year on year in the first quarter, the country’s first economic growth since the fourth quarter of 2019 amid continued expansion in the manufacturing sector, official preliminary data showed on Wednesday.
The year-on-year expansion in the first quarter reverses the 2.4% contraction in the fourth quarter of last year, the Ministry of Trade and Industry (MTI) said in a statement.
On a quarter-on-quarter seasonally-adjusted basis, the economy expanded by 2.0%, extending the 3.8% expansion in the preceding quarter.
"The sequential [quarter-on-quarter] slowdown in Q1 was largely driven by the construction sector, where activity continued to be capped by safe distancing measures at worksites," the Monetary Authority of Singapore (MAS) said in a statement.
The country's economy shrank by 5.4% year on year in 2020, its worst ever economic recession, due to the coronavirus pandemic.
The upturn in external demand will sustain an above-trend pace of growth in the Singapore economy for the rest of this year, with activity in the trade-related and services sector to expand at a firm rate, the MAS said.
“Singapore’s GDP growth this year is likely to exceed the upper end of the official 4-6% forecast range, barring a setback to the global economy,” the central bank said.
“However, 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,” it said.
Singapore’s manufacturing sector grew by 7.5% year on year in the first quarter following the 10.3% expansion in the preceding quarter, while the services sector contracted by 1.2% and the construction industry shrank by 20.2%.
Growth in the manufacturing sector was supported by output expansions in the electronics, precision engineering, chemicals and biomedical manufacturing clusters, which outweighed output declines in the transport engineering and general manufacturing clusters.
Focus article by Nurluqman Suratmann