Singapore GDP Q2 2022


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.”

FocusEconomics Consensus Forecast panelists see the economy expanding 4.1% in 2022, which is up 0.1 percentage points from the previous month’s forecast, and growing 3.3% in 2023.

Author: Massimo Bassetti, Senior Economist

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