Singapore exceeds Q1 growth expectations, but has an uneven recovery Business and Economic News

The government has not maintained its annual GDP forecast, but has warned that there is a higher level of uncertainty behind the usual than behind COVID.

Singapore’s economy has expanded more than expected in the first quarter and the government has maintained its annual growth forecast but has issued a cautious note on the recovery due to the uncertainties of the COVID-19 pandemic.

Gross domestic product (GDP) grew 1.3% year-on-year in the first quarter, the Ministry of Trade and Industry (MTI) said on Tuesday, higher than the 0.2 per cent growth seen in the government’s progress estimate.

Manufacturing, finance and insurance and wholesale trade boosted the expansion in the quarter. According to a Reuters poll, analysts expected a 0.9 percent rise.

MTI maintained its forecast for GDP growth for 2021 for the time being between 4% and 6% for the time being, but warned of the higher level of uncertainty caused by the pandemic as well as new domestic limits against the virus. Forecasts will be reviewed in August.

Authorities said last month that the growth could exceed the upper end of the forecast, with the recession caused by the COVID-19 pandemic in 2020, the worst on record.

Irregular recovery

If external demand exceeds expectations, while the Singapore economy is likely to exceed its growth forecast for 2021, there are significant downside risks, said Gabriel Lim, the permanent secretary of trade and industry.

“The pace of recovery in different sectors of the economy will be more unbalanced than previously expected,” he said.

On a quarterly basis, the economy expanded by 3.1% in the first quarter.

The city-state is often seen as a bellows for global growth as international trade shrinks its domestic economy.

The government has earmarked more than $ 100,000 billion ($ 75.34 billion) from Singapore to tackle the economic downturn. The central bank maintained an adaptive monetary policy at its last meeting in April.

“The supportive and supportive push for fiscal and monetary policy continues throughout the system,” said Edward Robinson, deputy director of the Singapore Monetary Authority (MAS).

He said that the policy stance is appropriate and that the MAS will review the policy in October, as planned.

The central bank will look at factors that could affect “the dynamics of inflation as well as growth”, he said.

Singapore imposed a number of restrictions on rallies this month, the hardest since it stopped blocking last year, to tackle the latest period of local COVID-19 infections, including banning canteens, restricting rallies and demanding a return from home to work. .

The rise in cases – linked to a more virulent and unpredictable strain of the virus that first appeared in India – has also led to tightening of borders. Famous events like the annual Shangri-La Dialogue held next month were canceled at the World Economic Forum in August.

“It’s a big abuse in the first quarter, we’re pulling it back a bit,” said Selena Ling, head of finance research and strategy at OCBC Bank.