SINGAPORE (May 25): Singapore’s economy grew by 0.4 per cent on a year-on-year basis in the first quarter of 2023, moderating from the 2.1 per cent expansion in the previous quarter, said the republic’s Ministry of Trade and Industry (MTI) today.
The Singapore economy expanded by 3.6 per cent in 2022.
In a statement on the country’s economic performance for the quarter, the ministry said it maintained Singapore’s 2023 Gross Domestic Product (GDP) growth forecast at 0.5 to 2.5 per cent, with growth likely to come in at around the mid-point of the range.
On a quarter-on-quarter seasonally-adjusted basis, MTI said the economy contracted by 0.4 per cent, a reversal from the 0.1 per cent growth in the fourth quarter of 2022.
On sectoral performance, it said the manufacturing sector shrank by 5.6 per cent year-on-year, worsening from the 2.6 per cent contraction in the preceding quarter.
“The weak performance of the sector came on the back of output declines across all clusters except for the transport engineering cluster,” it said.
MTI said the construction sector expanded by 7.2 per cent year-on-year, extending the 10.0 per cent growth in the preceding quarter, with both public and private sector construction output increased during the quarter.
It said the accommodation sector meanwhile grew by 21.9 per cent year-on-year, accelerating from the 7.8 per cent growth in the previous quarter.
“Growth during the quarter was supported by a strong recovery in international visitor arrivals from a low base in the same period of last year when inbound travel restrictions were still in place,” it said.
On the economic outlook for 2023, MTI said the performance of advanced economies, such as the US and Eurozone, has been more resilient than expected, supported by domestic services demand.
“Nonetheless, their growth outlook for the rest of the year remains weak,” it said.
Meanwhile, the MTI said China’s economic recovery is likely to be stronger than earlier expected, driven by a pickup in domestic services consumption following the lifting of its Covid-19 restrictions.
However, it said continued stresses in its property market, as well as weakness in its industrial sector, amidst subdued external demand conditions would continue to weigh on its recovery.
MTI also said that despite weaker external demand for their merchandise goods and commodities, the growth prospects of key Southeast Asian economies, such as Malaysia, Indonesia, and Thailand, remained positive, supported by resilient domestic demand as well as the continued recovery.
Against this backdrop, MTI assessed that Singapore’s external demand outlook for the rest of the year has weakened.
“Domestically, the growth outlook for the aviation- and tourism-related sectors of the Singapore economy remains positive given the ongoing recovery in international air travel and inbound tourism.
“On the other hand, the outlook for the manufacturing and other trade-related sectors of the economy has weakened,” it said.
In particular, MTI said the manufacturing sector is projected to see a deeper downturn, led by output contractions in the electronics and precision engineering clusters in tandem with weaker global semiconductor demand, as well as the chemicals cluster due to sluggish demand from China. – Bernama