Singapore: Economy contracts in the first quarter
April 12, 2013
In the first quarter, GDP declined at a seasonally-adjusted annualized rate (saar) of 1.4% over the previous quarter, according to an advance estimate released by the Ministry of Trade and Industry (MTI) on 12 April. The negative reading contrasted both the 3.3% expansion observed in the fourth quarter of 2012 and market expectations of a 1.7% increase. Compared to the same month last year, GDP fell 0.6% (Q4 2012: +1.5% year-on-year), the first decline seen in almost four years.
The deterioration in Q1 mainly reflected a worse performance in manufacturing industries, which swung from a 3.1% annualized expansion in the fourth quarter to an 11.3% decline in the first, mainly on the back of a contraction in the biomedical cluster. Meanwhile, construction output added 15.1% in the first quarter (Q4: -3.9% quarter-on-quarter saar), while services grew 1.8% (Q4: +2.5% qoq saar).
The Monetary Authority of Singapore expects GDP to grow between 1.0% and 3.0% this year. FocusEconomics Consensus Forecast panellists project the economy to increase 2.7% in 2013, which is down 0.1 percentage points from last month's forecast. For 2014, the panel expects growth to accelerate to 3.9%.