In a press released issued by Singapore’s Ministry of Trade and Industry (MTI), the island nation’s economy has contracted by 0.7 percent on a year-on-year basis in the first quarter. The country’s previous quarter registered a 1 percent growth.
“On a quarter-on-quarter seasonally-adjusted annualised basis, the economy shrank by 4.7 percent, a pullback from the 0.6 percent expansion in the fourth quarter of last year,” MTI said.
Following the economic hit from the pandemic as well as the Circuit Breaker in place, the GDP growth forecast for Singapore this year has been downgraded to “-7.0 to -4.0 percent”, from “-4.0 to -1.0 percent”.
“There remain significant uncertainties in the global economy. There is a risk that subsequent waves of infections in major economies such as the US and Eurozone may further disrupt economic activity,” MTI highlighted.
Additionally, a growing perception of diminished fiscal and monetary policy space in many major economies could damage confidence in authorities’ ability to respond to shocks, undermining risk appetite and driving further financial market volatility.
“Against this backdrop, the outlook for the Singapore economy has weakened further since March.”
In terms of sectoral performances, the manufacturing sector expanded by 6.6 percent year-on-year, reversing the 2.3 percent contraction in the previous quarter.
Growth was attributed to output expansions in the biomedical manufacturing, precision engineering and transport engineering clusters, which had outweighed output declines in the electronics, general manufacturing and chemicals clusters.
The construction sector contracted by 4 percent year-on-year, a reversal from the 4.3 percent expansion in the previous quarter. The performance of the sector was weighed down primarily by a fall in private sector constructions works.
On the other end, the wholesale and retail trade sector registered a decline by 5.8 percent year-on-year, extending the 1.9 percent decline in the previous quarter, as both the wholesale trade and retail trade segments contracted.
“The segment saw a sharp pullback in growth as a result of weaker global demand and disruptions in supply chains due to the pandemic,” MTI stated.
According to the ministry, the transportation and storage sector contracted by 8.1 percent year-on-year, a reversal from the 0.8 percent expansion in the previous quarter. The air transport segment shrank due to the steep decline in air passengers handled at Changi Airport.
Similar sluggish growth was observed in both water and land transport segments as well.
As for the accommodation and food services sector contracted by 23.8 percent year-on-year, which is a significant pullback from the 2.5 percent growth in the preceding quarter.
MTI has further stated that the information and communications sector grew by 3.5 percent year-on-year, moderating from the 4.5 percent growth in the previous quarter.
Meanwhile, the finance and insurance sector expanded by 8 percent year on year, faster than the 4 percent growth in the previous quarter.
As for the business services sector, it shrank by 3.3 percent year-on-year, reversing the 1.7 percent growth in the fourth quarter on the back of contractions in the real estate, professional services and other segments.