Singapore posts surprise economic growth in first quarter, with GDP expanding 0.2 per cent year on year
- The growth was driven by manufacturing, which expanded 7.5 per cent year on year, as well as electronics, precision engineering, chemicals and biomedical sectors
- Analysts warned the deteriorating coronavirus situation in Southeast Asia and the slow vaccine roll-out in the region could threaten the recovery
The country’s export-dependent economy grew 0.2 per cent from the same period last year, according to advance estimates released by the trade ministry on Wednesday, rebounding from -2.4 per cent in the fourth quarter. On a quarterly seasonally adjusted basis, the economy grew 2 per cent.
The growth was driven primarily by the manufacturing sector, which expanded 7.5 per cent year on year, propped up by output expansions in the electronics, precision engineering, chemicals and biomedical manufacturing clusters, the trade ministry said.
However, analysts warned the worsening coronavirus situation in Southeast Asia and the slow vaccine roll-out in the region could threaten the rosy outlook.
Lee Ju Ye, economist at Maybank Kim Eng, noted the services and construction sectors were still “sluggish”, and this could be due to the lack of significant resumption of activities from the fourth quarter of last year to the first quarter of 2021.
Singapore entered its third phase of reopening on December 28, which saw the easing of some Covid-19 restrictions, including allowing social gatherings of up to eight people. Some events could be held but with a small number of people permitted.