Singapore's GDP growth rate falling short of projections

Singapore’s economy (GDP) grew at a slower pace in the first quarter of 2022, falling just short of economists’ expectations, says The Straits Times.

According to preliminary estimates, GDP increased by +3.4 percent year on year, down from the +6.1 percent rise witnessed in the fourth quarter of 2021.

Moderate GDP expansion

Singapore’s economy expanded at moderate pace of +3.4%yoy in 1QCY22 (4QCY21: +6.1%yoy). The advance estimate showed that the decline was sharper than expected, attributable to slower growth in the manufacturing, construction and services sectors.

Despite the moderation in 1Q, the strong demand and production for the E&E and semiconductors supported the manufacturing sector growth.

“Going into the 2QCY22, with the further reopening of the economy as the government lifted Covid-19 restrictions despite rising Covid-19 cases earlier this year, we opine the momentum of growth will improve going forward,” says MIDF.

Nevertheless, the outlook could be influenced by external developments such as the geopolitical conflict in Ukraine and the recent lockdown in China, which may also affect the global supply chain and demand outlook.

Rising inflation could also affect the growth outlook. In response to the concern over higher inflation, the Monetary Authority of Singapore last week decided to tighten its policy again, by allowing the Singaporean dollar to appreciate, on top of the tightening back in Oct-21 and Jan-22.