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Image Credits: Singapore Financial Sector, Marina Bay, Cegoh, Pixabay

MTI maintains 2018 GDP growth forecast at 2.5 to 3.5 percent

The GDP growth forecast for 2018 is maintained at “2.5 to 3.5 per cent” on a year-on-year basis in the second quarter, easing from the 4.5 per cent growth in the previous quarter.

In a press release on Monday (13 August), the Ministry of Trade and Industry (MTI) reported that on a quarter-on-quarter seasonally-adjusted annualised basis, the economy expanded at a slower pace of 0.6 per cent compared to the 2.2 per cent growth in the preceding quarter.

The minister stated that the manufacturing sector grew by a robust 10.2 per cent year-on-year, extending the 10.8 per cent growth in the previous quarter. All clusters within the sector expanded, with the electronics, biomedical manufacturing and transport engineering clusters contributing the most to growth.

On a quarter-on-quarter seasonally-adjusted annualised basis, the manufacturing sector grew by 1.8 per cent, slowing from the 26.2 per cent growth in the preceding quarter.

The construction sector contracted by 4.6 percent year-on-year, easing from the 5.2 percent decline in the previous quarter. Construction output was weighed down primarily by public sector construction works. On a quarter-on-quarter seasonally adjusted annualised basis, the sector shrank by 15.4 percent, a reversal from the 0.8 percent growth in the preceding quarter.

The wholesale & retail trade sector expanded by 1.5 per cent year-on-year, moderating from the 2.5 per cent growth in the previous quarter. Growth was supported by both the wholesale trade and retail trade segments.  The wholesale trade segment grew on the back of strong growth in the machinery, equipment & supplies sub-segment.

Meanwhile, retail sales volume rose by 0.4 per cent, supported by both motor vehicular and non-motor vehicular sales. On a quarter-onquarter seasonally-adjusted annualised basis, the wholesale & retail trade sector expanded by 5.4 per cent, a turnaround from the 12.9 per cent contraction in the first quarter of the year.

Growth in the transportation & storage sector eased to 1.3 percent year-on-year, from 2.7 per cent in the previous quarter. The sector’s growth was driven mainly by the air transport segment, which expanded on the back of an increase in air passengers handled at Changi Airport. On a quarter-on-quarter seasonally-adjusted annualised basis, the sector contracted by 2.7 percent, extending the 4.2 percent decline in the preceding quarter.

The accommodation & food services sector grew by 4.0 per cent year-on-year, faster than the 2.0 per cent growth in the previous quarter. The accommodation segment was the main driver of the sector’s growth, and was in turn supported by  higher gross lettings at gazetted hotels in line with an increase in visitor arrivals.

By contrast, the performance of the food services segment was lacklustre, weighed down by the weak sales performance of restaurants and other eating places. On a quarter-on-quarter basis, the accommodation & food services sector grew at a seasonally-adjusted annualised rate of 13.3 per cent, a reversal from the 4.7 percent contraction in the preceding quarter.

The information & communications sector expanded by 5.2 per cent year-on-year, easing slightly from the 5.4 per cent growth in the previous quarter. Growth was primarily driven by the IT & information services segment on the back of healthy demand for IT solutions. On a quarter-on-quarter seasonally-adjusted annualised basis, the sector grew by 3.0 per cent, quicker than the 2.0 per cent growth in the preceding quarter.

Growth in the finance & insurance sector came in at 6.7 per cent year-on-year, extending the 9.2 per cent growth in the previous quarter, and was supported by expansions across all segments. On a quarter-on-quarter seasonally-adjusted annualised basis, the sector contracted by 1.8 per cent, reversing from the 4.8 percent growth in the first quarter of the year.

The business services sector grew by 2.1 percent year-on-year, moderating from the 2.6 percent growth in the preceding quarter. Growth was supported by the professional services and others segments, even as the contraction in the real estate segment eased. On a quarter-on-quarter seasonally-adjusted annualised basis, the sector shrank by 3.2 percent, a pullback from the 11.4 percent growth in the previous quarter.

The “other services industries” expanded by 0.7 per cent year-on-year, slowing from the 2.3 per cent growth in the preceding quarter. Growth was supported by the education, health & social services segment. On a quarter-on-quarter seasonally-adjusted annualised basis, the sector contracted by 2.0 percent, extending the 2.4 percent decline in the first quarter of the year.