Singapore GDP growth slows in Q1

Singapore: Singapore’s trade-sensitive economy slowed in the first quarter on sluggish demand for its exports, the government said on Thursday, warning that risks remained despite improved global conditions.

The Ministry of Trade and Industry said gross domestic product (GDP) climbed 0.2 per cent year-on-year in the three months to March, much slower than the preceding quarter’s 1.5 per cent year-on-year growth.

Compared with the previous quarter, the economy rose 1.8 per cent, the ministry said, revising advance estimates released last month which showed GDP had shrunk 1.4 per cent.

However, this was still slower than the 3.3 per cent quarter-on-quarter jump in the previous three months.

“The pullback in the quarter-on-quarter growth momentum was mainly due to the decline in externally-oriented sectors such as manufacturing and wholesale trade,” the ministry said.

Manufacturing, which accounts for about a quarter of the economy, slumped 6.8 per cent year-on-year and 12.3 per cent when compared with the previous quarter.

Growth should “improve gradually” for the rest of the year in tandem with an expected rise in global demand for exports, supported by domestic drivers such as the construction and services sectors, the ministry said.

It kept its growth forecast at 1.0-3.0 per cent this year, barring downside risks.

“Fiscal uncertainties in the US remain with the failure of Congress to raise the debt ceiling, while the Eurozone is prone to a potential flare-up of the sovereign debt crisis,” the ministry said in a statement.

“Other uncertainties include the risk of an escalation in regional geopolitical tensions and a possible outbreak of respiratory viruses.”

In a separate statement, the city-state’s trade promotion body International Enterprise Singapore said total trade fell 9 per cent year-on-year to 230 billion Singapore dollars (Dh668.02 billion, $181 billion) in the first quarter.

Key non-oil domestic exports tumbled 12.5 per cent year-on-year, accelerating from the 4.2 per cent decline in the preceding three months, on lower shipments of electronic and non-electronic items.

“Global macroeconomic conditions have stabilised and global economic growth is expected to improve gradually. Singapore’s trade is expected to pick up in tandem with the projected gradual recovery in global demand,” IE Singapore said.