SINGAPORE: Singapore’s economy, in the first three months of 2024, grew at its weakest quarter-on-quarter (q-o-q) pace in a year as manufacturing slowed, but economists see growth strengthening ahead.
On a q-o-q seasonally adjusted basis, the economy expanded by 0.1% in the first quarter, down from the 1.2% growth in the fourth quarter of 2023, according to advance estimates released on April 12 by the Trade and Industry Ministry.
OCBC Bank chief economist Selena Ling noted that q-o-q growth was the slowest since the first quarter of 2023. It is also lower than the 0.5% gain tipped by analysts in a Bloomberg poll.
Compared with the same period last year, the economy grew 2.7%, higher than the 2.2% expansion in the fourth quarter of 2023. However, this figure also missed the Bloomberg poll’s median forecast of 3% growth.
Ling said: “Importantly, there was no change to the 2024 official growth forecast of 1% to 3% year-on-year (y-o-y), or to the headline and core inflation forecasts of 2.5% to 3.5% y-o-y.
“Singapore’s growth trajectory is tipped to strengthen for the subsequent quarters of 2024, predicated on an improvement in the manufacturing recovery theme, especially for electronics, and accompanied by the financial sector in anticipation that risk appetite should be buoyed by the global monetary policy easing cycle in the second half of 2024.”
Maybank economist Chua Hak Bin said the economy is cruising once again, but the growth is somewhat uneven.
He said the manufacturing and electronics recovery is weaker than expected, while the services industries are buoyant because of visa waivers for China tourists, a stronger trade-related services sector, as well as a Taylor Swift boost.
Chua added that revenge travel may lose some steam for the rest of the year even though it made a strong comeback in the first quarter.
In the services sectors, wholesale and retail trade, and transportation and storage collectively grew 2.7% y-o-y in the first quarter, up from 1% in the previous quarter.
Sectors comprising the information and communications, finance and insurance and professional services sectors grew 4.2% y-o-y in the first quarter, faster than then the 3.6% growth in the previous quarter.
The ministry said growth in the information and communications sector was bolstered by continued strong demand for information technology and digital solutions, while that in the professional services sector was mainly driven by the head offices and business representative offices segment.
The accommodation and food services, real estate, administrative and support services and other services sectors expanded by 2.9% y-o-y in the first quarter, up from 2% in the previous quarter.
Manufacturing growth, however, slowed to 0.8% y-o-y in the first quarter, lower than the 1.4% expansion in the previous quarter.
“Within the sector, output expansions in the chemicals, precision engineering and transport engineering clusters more than offset output contractions in the electronics, biomedical manufacturing and general manufacturing clusters,” the ministry said.
The construction sector grew 4.3% y-o-y in the first quarter, down from the 5.2% growth in the previous quarter, led by a decline in private sector construction output. — The Straits Times/ANN
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