KUALA LUMPUR – Singapore’s Ministry of Trade and Industry (MTI) reported a growth of 3.7% to the republic’s economy over the first quarter of 2022 (Q1 2022).
According to Singapore’s Economic Performance in First Quarter 2022 report, Q1 2022’s figure had declined from the 6.1% growth recorded in the previous quarter.
In the report, the ministry reaffirmed their projection of 3.0% to 5.0% for this year, with expansion around the lower half of the prediction range.
Singapore’s economy expanded by 0.7% on a quarter-on-quarter seasonally-adjusted basis. This was less than the 2.3% expansion recorded in 2021’s fourth quarter.
The report revealed that Singapore’s manufacturing sector had grown by 7.1% year-on-year, extending the 15.5% expansion in the last quarter.
It stated that the Q1 2022 manufacturing sector growth was attributed to the output expansions in electronics, transport engineering, general manufacturing, and precision engineering clusters. These outweigh the declines for outputs in the biomedical manufacturing and chemicals field.
Additionally, the republic’s construction industry also increased by 2.1% year-on-year, a slight decrease from the 2.9% growth for last quarter due to the pick up of construction activities in both the public and private sector then.
The transportation and storage industry marked 5.9% increase year-on-year although the figure moderated from the previous 7.5% growth in the fourth quarter of 2021.
The report explained that the air transportation segment had a significant increase in activity due to there being more air travel passengers going through Changi Airport following relations of border measures.
Apart from that, the report stated that the finance and insurance sector grew by 4.0% year-on-year, a decrease from the 5.6% growth marked in the preceding quarter.
External economy decline
The MTI stated that since February this year, Singapore’s foreign economic situation has deteriorated in part due to the Russian-Ukraine war.
The report highlighted that the conflict caused disruptions to supplies of energy, food and other commodities that has resulted in exacerbating inflationary pressures worldwide and impacting the growth of many economies.
Along with China’s stringent policies implemented to contain the country’s COVID-19 spread, global supply chain will continue to experience constraints.
“Consequently, global supply disruptions are expected to be worse and prolonged further compared to when previously anticipated, potentially lasting throughout 2022,” it added.
Singapore’s MTI also forecasts moderation to the GDP in 2022 in the US adding that economic forecasts for Eurozone countries have weakened from the war.
In Southeast Asia, the report expects economies for Malaysia, Indonesia and Thailand to show improvements this year.
It echoes sentiment from other economists and analysts that these countries will be bolstered by an increase in domestic demand as a result of relaxation of public health regulations, and continuing demands for exported goods.
Apart from that, the report notes that some sectors in Singapore’s economy have an improvement in their growth outlook, such as the electronics cluster.
Additionally, the cluster is anticipated to expand much stronger than previously projected, supported by strong demands of semiconductors from the 5G and automotive markets along with cloud services and data centres.
Taking Singapore’s Q1 2022 performance into account, together with the recent global and domestic economic developments, the MTI reiterates that it continues to anticipate Singapore’s economy to grow by 3.0% to 5.0% this year, although the growth is likely to be around the lower half of the forecast range.
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