Singapore GDP growth moderates to 3.4% in Q1, below forecasts: Flash data

Gross domestic product (GDP) grew 3.4 per cent year on year, moderating from the 6.1 per cent expansion seen in the fourth quarter of 2021, according to advance estimates released by the Ministry of Trade and Industry (MTI) on Thursday (April 14).

This was lower than the 3.8 per cent year-on-year growth forecast by economists in a Bloomberg poll.

On a quarter-on-quarter seasonally adjusted basis, the economy expanded 0.4 per cent, slower than the 2.3 per cent growth seen in the previous quarter.

Most sectors saw slower growth in the first quarter on a year-on-year basis.

Growth for the key manufacturing sector normalised to 6 per cent year on year, compared with the 15.5 per cent seen in the fourth quarter of last year.

The electronics and precision engineering clusters continued to record strong output growth, driven by sustained global demand for semiconductors and semiconductor equipment.

On a quarter-on-quarter seasonally adjusted basis, the manufacturing sector contracted by 1.2 per cent in the first quarter, a reversal from the 6.3 per cent growth in the previous quarter.

The construction sector grew 1.8 per cent year on year in the first quarter, slower than the 2.9 per cent posted the previous quarter.

In absolute terms, the value-added of the sector remained 25.3 per cent below its pre-pandemic level, with activity at construction worksites remaining weighed down by labour shortages.

Among the services sectors, the group of sectors comprising the wholesale and retail trade, and transport and storage segments posted a 3.2 per cent increase year on year, extending the growth seen the preceding quarter.

In particular, the wholesale trade sector grew in tandem with the robust performance of Singapore's merchandise exports.

The value-added of this group of sectors remained 1.2 per cent below its pre-pandemic level in the first quarter. 

Meanwhile, the information and communications, finance and insurance and professional services sectors collectively expanded 5.3 per cent year on year in the first quarter, moderating from the 6.6 per cent growth seen in the preceding quarter. 

However, on a quarter-on-quarter seasonally adjusted basis, the sectors contracted 2 per cent in the first quarter, reversing the 2.5 per cent increase seen in the fourth quarter. 

The remaining group of services sectors saw quicker growth of 3 per cent year on year in the first quarter, compared with the 1.6 per cent expansion in the previous quarter. 

All sectors within the group expanded, except for the accommodation and food services sector, which was dampened primarily by a fall in government demand for hotel rooms to serve as quarantine facilities as Singapore transitioned towards living with Covid-19. 

For the whole of 2021, Singapore's economy grew 7.6 per cent, rebounding from the 4.1 per cent contraction seen in the previous year.

Ahead of Russia's invasion of Ukraine in February, the Ministry of Trade and Industry had projected GDP growth of 3 per cent to 5 per cent for the whole of 2022.

Rising price pressures have been a key concern so far in 2022, with global commodity price shocks and supply chain disruptions adding to domestic cost pressures. 

To safeguard against the inflation threat, the Monetary Authority of Singapore further tightened monetary policy in its biannual review on Thursday, building on policy moves made last October and in January this year. 

This tighter stance will slow the inflation momentum and help ensure medium-term price stability, the central bank said.

By Choo Yun Ting

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