Good news as Singapore economy grows 14.7% in Q2

[ASEAN NOW News]

SINGAPORE: Some good news as Singapore's economy grew by 14.7 per cent year-on-year in the second quarter of 2021, faster than the 1.5 per cent growth in the previous quarter, the Ministry of Trade and Industry (MTI) said on Wednesday (Aug 11). 

 

According to CNA, the ministry also upgraded the GDP growth forecast for 2021 to 6 to 7 per cent, up from 4 to 6 per cent.

 

 

This is based on the "better than expected" performance of the Singapore economy in the first half of the year, as well as the latest external and domestic economic developments, MTI said. 

 

The 14.7 per cent Q2 figure beat a Reuters poll, which predicted a 14.2 per cent increase.

 

With the COVID-19 situation in Singapore stabilising and the country's vaccination programme on track, "Singapore's economy is expected to continue to see a gradual recovery in the second half of the year, supported in large part by outward-oriented sectors," according to the ministry. 

 

The progressive easing of domestic and border restrictions will also play a part in supporting the recovery of Singapore's consumer-facing sectors and alleviate labour shortages in sectors that are reliant on migrant workers, it added. 

 

LOW BASE

 

The strong growth in the second quarter was largely due to the "low base" in the same period last year when GDP fell by 13.3 per cent due to the COVID-19 "circuit breaker" and a sharp drop in external demand brought on by the pandemic, said MTI.

 

Considering the GDP performance in the first quarter of 2021, the Singapore economy expanded by 7.7 per cent on a year-on-year basis in the first half of 2021.

 

Sharp improvements across all clusters in the manufacturing sector supported the overall expansion in the April to June period. The sector grew 17.7 per cent year-on-year, with the transport and precision engineering clusters seeing the largest increases in output. 

 

The constructor sector, led by an expansion of public and private projects, was also a big growth driver. It expanded 106.2 per cent from the same period last year, a big turnaround from the 23.2 per cent fall in the previous quarter.

 

The wholesale trade sector expanded by 2.9 per cent year-on-year, led by the machinery, equipment, and supplies segment. 

 

The retail trade sector expanded by 50.7 per cent, while the transportation and storage sector grew by 20.9 per cent year-on-year. 

 

The accommodation sector expanded by 13.2 per cent year-on-year, easing from the 16.3 per cent growth in the preceding quarter.

 

"Growth during the quarter was supported by government and domestic tourism demand, even as weak international visitor arrivals due to travel restrictions continued to weigh on the sector," said MTI. 

 

The food and beverage services sector grew by 36.7 per cent year-on-year, supported by an increase in sales volumes at restaurants, cafes, food courts and other eating places and fast food outlets from the low base caused by last year's "circuit breaker". 

 

Food caterers, however, continued to be adversely affected by restrictions on large-scale events and gatherings, said MTI. 

 

The information and communications sector expanded by 9.6 per cent, while the finance & insurance sector came in at 9.1 per cent year-on-year. 

 

The real estate and professional services sectors also grew year-on-year by 25.8 per cent and 9.4 per cent respectively.

 

The administrative and support services sector was the only one to contract year-on-year, shrinking by 1.3 per cent, moderating from the 15.1 per cent contraction in the previous quarter. 

 

"Within the sector, the rental & leasing segment shrank as travel restrictions adversely affected the rental and leasing of air transport equipment," MTI said. 

 

 

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