Singapore’s economy grew by 2.7% year-on-year in the first quarter of 2017, easing from the 2.9% growth in the previous quarter, the Ministry of Trade and Industry (MTI) announced.
On a seasonally adjusted annualized basis, the economy contracted by 1.3% quarter-on-quarter, after posting a strong rebound of 12.3% in the preceding quarter.
The ministry said the city-state is maintaining its GDP growth forecast for 2017 at 1.0% to 3.0%, with growth likely to come in higher than 2.0% if downside risks do not come about.
The manufacturing sector grew by 8.0% year-on-year, moderating from the 11.5% growth recorded in the previous quarter, on the back of robust global demand for semiconductors and semiconductor manufacturing equipment.
The construction sector contracted by 1.4% year-on-year, extending the 2.8% decline in the previous quarter, due to continued weakness in private sector construction works.
Growth in wholesale & retail trade came in at 0.5% year-on-year, similar to the 0.4% in the previous quarter.
The transportation & storage sector expanded by 4.2% year-on-year, following the 5.4% expansion in the previous quarter. Growth was largely driven by water transport, supported by the pickup in sea cargo handled and container throughput.
The accommodation & food services sector contracted by 1.9% year-on-year, extending the 0.2% decline in the preceding quarter, as the food services segment contracted.
Growth in information & communications picked up to 1.7% year-on-year, from the 1.4% in the previous quarter. The sector’s growth was driven by the IT & information services segment, supported by robust demand for IT solutions.
The finance & insurance sector expanded by 0.9% year-on-year, a modest improvement from the 0.6% growth in the previous quarter, largely due to the strong performance of the financial intermediation segment.
The business services sector grew by 2.1% year-on-year, reversing the 1.9% contraction in the previous quarter. Growth was supported by the professional services and “others” segments, while the real estate segment continued to contract.
Growth in the “other services industries” came in at 2.3%, slower than the 3.9% in the preceding quarter. Growth was supported by both the education, health & social services and the arts, entertainment & recreation segments.
MTI said the outlook for the global economy has improved slightly since early 2017 on the back of an improvement in the growth outlook for the advanced economies. Overall, global growth this year is expected to be higher than that in 2016.
Nonetheless, uncertainties and downside risks remain. Rising anti-globalization sentiments could have an adverse impact on global trade. Furthermore, political risks and economic uncertainties persist, including in Europe where the UK is navigating through “Brexit” and in the U.S. where policy uncertainties remain elevated.
Monetary conditions may tighten further in China amidst efforts to contain leverage and risks in the financial system, which could slow down growth in the mainland more sharply than expected, said MTI.
Photo by CEphoto, Uwe Aranas
