Singapore: Robust first quarter growth is confirmed
May 18, 2011
According to revised figures released on 18 May, first quarter GDP expanded 8.3% over the same period last year, which represents downward correction of 0.2 percentage point to the preliminary estimate released in April. The robust growth, despite finishing below the previous quarter's 12.0% expansion, underscores the health of the economy, as the moderation reflects the waning of a favourable base effect, with the recovery peaking at a stellar 19.4% expansion in the second quarter 2010. That said, the deceleration was mainly fuelled by developments on the domestic front, led by a 9.5% contraction in fixed investment (Q4 2010: +5.7% year-on-year) along with a 5.0% decline in government spending (Q4 2010: +11.3% yoy). In contrast, private consumption accelerated from a 4.3% expansion in the fourth quarter to a 5.0% increase. In the external sector, the net contribution to overall growth improved, as imports decelerated more markedly than exports. While imports moderated to a 5.6% expansion (Q4 2010: +12.8% yoy), exports slowed to a 8.4% increase (Q4 2010: +12.1 % yoy). At the sector level, the moderation was mainly the result of slower growth in the manufacturing sector, which slowed from growth of 25.5% in the fourth quarter to a 13.1% expansion. In addition, the services sector, which accounts for nearly two thirds of GDP, also slowed to a 7.3% increase (Q4 2010: +8.8% yoy). A quarter-on-quarter analysis does not point to a deceleration, as the economy grew 22.5% over the fourth quarter in seasonally adjusted annualised terms, well above the feeble 3.9% expansion tallied in the previous quarter. Against this backdrop, the Ministry of Trade and Industry (MTI) raised its growth forecast for this year to between 5% and 7%, up from the previous range of 4% to 6%.