Singapore: Year-on-year GDP growth accelerates in Q2
July 15, 2022
The economy expanded 4.8% year on year in the second quarter of 2022, accelerating from Q1’s 4.0% growth but below market expectations. Meanwhile, in seasonally-adjusted quarter-on-quarter terms, the economy recorded no growth in Q2, decelerating from the 0.9% expansion recorded in the prior quarter.
The acceleration in annual growth was broad based. Growth in the services sector came in at 4.7% year on year in Q2 (Q1: +4.3% yoy), with activity benefitting from the gradual loosening of Covid-19 restrictions since April. Meanwhile, growth in the construction sector sped up to 3.8% in Q2 from 1.8% in the prior quarter. Moreover, growth in the manufacturing sector picked up to 8.0% in Q2 from 7.9% in Q1.
Commenting on the outlook, Alvin Liew and Peter Chia, analysts at UOB, stated:
“There are several well-telegraphed external risks that have weakened Singapore’s outlook; 1) the on-going Russia-Ukraine conflict and its impact on commodity prices (and the resulting elevated inflation risks and [which can hurt] domestic demand), 2) global supply chain disruptions, 3) monetary policy tightening stance in the advanced economies, and 4) COVID-19 risks. […] We remain confident that Singapore will be well placed to transition into a COVID-19 endemic state and return closer to normalcy which will be positive for the services and construction sectors, while manufacturing continues to underpin growth outlook.”