(May 21): Singapore’s economy grew at a faster pace in the first quarter than the government previously estimated, a sign of the city state’s resilience in the face of weaker global demand and a worsening US-China trade war.
Gross domestic product rose an annualised 3.8% from the prior quarter, higher than the government’s earlier projection of 2% and above the median forecast of 2.3% in a Bloomberg survey of economists. Compared to a year ago, GDP rose 1.2%.
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Exports in the trade-reliant economy have been hit by a downturn in the global tech cycle and more subdued growth in China.
Non-oil shipments plunged 10% in April from a year ago as electronic exports contracted 16.3%, a report last week showed A rebound in construction and solid demand for services helped to underpin growth in the quarter.
The Ministry of Trade and Industry sees “pockets of strength” in the economy this year from the services industry, while manufacturing will see a “sharp slowdown in growth following two years of robust expansion”
The government narrowed its growth forecast range for 2019 to 1.5% to 2.5% Oxford Economics’ Sian Fenner sees the gloomy trade outlook weighing on growth, giving the central bank room to ease monetary policy this year, possibly at its October meeting.
The Monetary Authority of Singapore, which uses the exchange rate as its main tool, left its policy stance unchanged in April Edward Robinson, chief economist at the MAS, told reporters Tuesday that the current policy stance was “appropriate,” and inflation pressure will likely be stable this year
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In a separate report, Enterprise Singapore lowered its forecast for 2019 non-oil domestic exports to a range of –2% to 0%.
The Department of Statistics revised previously published data after adopting an annual chain-linked benchmarking methodology to calculate GDP.
The move is in line with United Nations’ standards and allows for the data to better reflect changes in the economy.
As a result, GDP growth for 2018 was revised to 3.1% from 3.2%.
