Buoyed by strong performances in the manufacturing and services sector, Singapore economy grew by 2.9 per cent from a year ago for the second quarter. The better performance has led the Ministry of Trade and Industry (MTI) to revise the Gross Domestic Performance (GDP) forecast for 2017 to ‘2.0 to 3.0 per cent’, from the earlier forecast of ‘1.0 to 3.0 per cent’.
Releasing the figures, MTI said, “The Singapore economy grew by 2.9 per cent on a year-on-year basis in the second quarter, faster than the 2.5 per cent growth in the previous quarter. On a quarter on-quarter seasonally-adjusted annualised basis, the economy expanded by 2.2 per cent, a reversal from the contraction of 2.1 per cent in the preceding quarter.”
Speaking about the healthy performance of the manufacturing sector, MTI said, “The manufacturing sector continued to grow at a robust pace of 8.1 per cent year on-year in the second quarter, following the 8.5 per cent growth in the previous quarter. Growth during the quarter was primarily supported by the electronics and precision engineering clusters, which expanded on the back of strong global demand for semiconductors and semiconductor-related equipment.”
On a quarter-on-quarter seasonally adjusted annualised basis, the manufacturing sector expanded by 2.9 per cent, accelerating from the 0.3 per cent growth in the previous quarter.
The services sector grew 2.4 per cent for the second quarter, up from the 1.4 per cent growth in the first quarter. Six out of the seven segments – wholesale and retail trade, transportation and storage, information and communications, finance and insurance, business services and other services industries – posted growth. Only the accommodation and food services segment contracted from a year ago.
Barring unexpected outcomes in the global economy and key sectors in the domestic economy for the rest of the year, MTI expects GDP growth for the full year to come in at around 2.5 per cent.
While speaking about the global economy, MTI said, “The outlook for the global economy has remained stable in recent months, with global growth on track to come in higher in 2017 as compared to 2016.”
However, MTI cautioned, “Even as global economic recovery is expected to continue on a "firm footing" for the rest of the year, downside risks such as anti-globalisation sentiments and global political risks and policy uncertainty remain.”
While relating about the US and Eurozone economy, MTI said, “In the US, the economy rebounded to grow at a faster pace in the second quarter of the year as compared to the first quarter. The growth momentum is expected to be sustained in the second half of the year, supported primarily by domestic demand. Meanwhile, the Eurozone economy is expected to remain stable, and to continue to grow at a modest pace for the rest of the year.”
Against this external backdrop, the MTI said the manufacturing sector is likely to continue to provide support to the Singapore economy in the second half of the year. Likewise, externally-oriented services sectors such as the transportation and storage, wholesale trade and finance and insurance sectors are expected to benefit from the pickup in global trade.