Singapore economy to grow faster than 6% in 2021

• Apr 29, 2021

SINGAPORE: Singapore’s economy has almost recovered the output lost during the first half of 2020, although its growth momentum eased in the first quarter of this year.

But while the outlook for Singapore’s economy has improved, projected growth outcomes across sectors have become even more lopsided than previously predicted, the Monetary Authority of Singapore (MAS) noted in its biannual macroeconomic review.

Prospects for sectors less affected by the pandemic, such as manufacturing, have brightened, but those for sectors worst-hit like air transport and accommodation have deteriorated somewhat amid the global rise in Covid-19 cases and the emergence of more contagious virus strains, which have diminished hopes of a substantial reopening of international borders in the near term.

MAS said that Singapore’s economic growth is likely to top 6% this year, exceeding the upper end of the 4% to 6% official growth forecast, barring a significant setback in activity from a weaker recovery of the global economy or a surge in locally transmitted cases.

But this robust estimate comes despite the continued unevenness in economic recovery and higher uncertainty, it cautioned.

In a virtual briefing, MAS deputy managing director Edward Robinson stressed that while it is providing “early qualitative guidance” on the gross domestic product forecast, the numerical range can be formalised only after the Ministry of Trade and Industry’s announcement in May.

Looking at the trends in early 2021, the trade-related industry’s continued upward trend was supported by the resilient manufacturing sector – industrial production expanded 8% quarter-on-quarter (q-o-q) in the January to March period on a seasonally adjusted basis – but the modern services sectors saw slower expansion in the early months of the year.

The travel-related sector has shown few indications of a revival so far, with the air transport segment remaining muted and hotel occupancy in Singapore falling after the year-end surge in demand, MAS said.

However, the water transportation segment saw a similar expansion to the manufacturing sector, with the volume of total sea cargo handled at Singapore’s ports rising 3.2% q-o-q.

Singapore’s growth for the year is likely to be robust, MAS said, with external demand picking up and business sentiment among firms in the Republic turning positive in the first quarter of 2021. — The Straits Times/ANN