The Ministry of Trade and Industry (MTI) has announced on Wednesday (14 February) that Singapore's economy grew by 3.6 per cent in 2017 and expects GDP growth to moderate from 2017’s growth, slightly above the middle of the forecast range of "1.5 to 3.5 per cent" for 2018.
MIT stated that Singapore economy grew by 3.6 per cent on a year-on-year basis in the fourth quarter, easing from the 5.5 per cent growth in the third quarter. On a quarter-on quarter seasonally-adjusted annualised basis, the Singapore economy expanded by 2.1 per cent, a moderation from the 11.2 per cent growth in the preceding quarter. For the whole of 2017, the Singapore economy grew by 3.6 per cent, faster than the 2.4 per cent growth in 2016.
The manufacturing sector is said to have expanded by 10.1 per cent, accelerating from the 3.7 percent growth in 2016. Growth is attributed to be largely driven by the electronics and precision engineering clusters, even as the biomedical manufacturing, transport engineering and general manufacturing clusters contracted.
Meanwhile, the construction sector is said to have shrunk by 8.4 percent, a reversal of the 1.9 percent growth in 2016. Output in the sector was primarily weighed down by the weakness in private sector construction works, which contracted by 29.1 per cent on the back of a decline in private residential and private industrial works.
Services producing industries grew by 2.8 percent, higher than the 1.4 percent growth in 2016. Growth was mainly supported by the finance & insurance, wholesale & retail trade and transportation & storage sectors, which expanded by 4.8 percent, 2.3 percent and 4.8 percent respectively.
Since November 2017, the outlook for global growth has improved slightly, with the IMF upgrading its global growth forecast for 2018 to 3.9 per cent, partly on the back of higher growth expected in the US due to the recently approved tax reforms.
However, it said that as compared to 2017, growth in most of Singapore’s key final demand markets such as the Eurozone, Japan, NIEs and ASEAN-5 is projected to moderate or remain unchanged in 2018.
The ministry stressed that the external demand outlook for Singapore is expected to be slightly weaker in 2018 as compared to 2017. Furthermore, while global macroeconomic risks have receded to some extent since the end of 2017, there remain some downside risks that could weigh on the global economy if they materialise.
Taking into account the global and domestic economic environment, MTI has maintained the 2018 GDP growth forecast at “1.5 to 3.5 per cent”. MTI stated that its central view is that growth will likely come in slightly above the middle of the forecast range, barring the materialisation of downside risks.