Singapore has stuck to its economic growth forecast for this year, seeing past the effect of restrictions imposed to stem an uptick in COVID-19 cases, while flagging that the global course of the pandemic remains a key risk.
GDP would rebound 4 to 6 percent this year, the Singaporean Ministry of Trade and Industry said in a statement yesterday, reiterating its previous forecast and citing improved performances by large economies such as the US.
The city-state’s GDP also grew more than previously estimated in the first quarter, the ministry said.
Photo: EPA-EFE
“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 program,” it said.
The trajectory of the pandemic is the main downside risk to its outlook, particularly within countries that are among Singapore’s major economic partners, the ministry said.
The full-year forecast would be reviewed again in August, the ministry said.
The rebound would follow last year’s 5.4 percent contraction, the economy’s worst performance since Singapore’s independence more than a half-century ago.
The Monetary Authority of Singapore is “completely aligned” with the trade ministry’s economic outlook, Edward Robinson, deputy managing director at the central bank, told a briefing, adding that its monetary policy stance remains appropriate.
A resurgence in infections this month prompted authorities to reissue some lockdown-like conditions that it put in place a year earlier, banning dining-in, limiting social gatherings and urging a return to working from home.
The increase in cases — linked to a more virulent and unpredictable strain of the virus that first surfaced in India — has also meant a tightening of borders. Prestigious events such as the annual Shangri-La Dialogue, set for next month, and the World Economic Forum in August, were canceled.
The ministry yesterday also published final economic estimates for the first quarter, which showed GDP grew a non-annualized, seasonally adjusted 3.1 percent from the previous three months, compared with the ministry’s advanced reading last month of 2 percent.
On a year-on-year basis, Singapore’s economy expanded 1.3 percent during the first quarter, compared with the earlier advanced figure of 0.2 percent.
Manufacturing, finance and insurance and wholesale trade were the “key sectors” that supported growth in the first quarter, Singaporean Permanent Secretary of the Ministry of Trade and Industry Gabriel Lim (林明亮) said in prepared remarks.
Tourism and aviation-related sectors, as well as consumer-facing sectors and construction, continued to contract.
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