SINGAPORE, May 25 — Singapore’s first-quarter economic growth was faster than the government earlier predicted, providing some relief for the trade-oriented nation as it faces sluggish global demand.

Gross domestic product expanded an annualised 0.2 per cent from the previous three months, the Ministry of Trade and Industry in an e-mailed statement today. That compares with the department’s April estimate of zero per cent and the median forecast of 0.6 per cent in a Bloomberg News survey of 12 economists.

Singapore is among the most vulnerable in Asia to swings in global demand. A weakening economy and falling prices prompted the central bank to unexpectedly ease its policy stance in April, saying it won’t seek currency appreciation. While the island benefited from a surge in manufacturing in the first quarter, that may be short-lived as global growth comes under pressure, the ministry said.

“The softening of global economic conditions, as well as the continued sluggishness in global trade, could weigh on externally-oriented sectors such as the manufacturing and transportation and storage sectors,” it said.

The government maintained its 2016 growth forecast of 1 per cent to 3 per cent. That compares with the International Monetary Fund’s projection of 1.8 per cent this year and about 2.5 per cent in 2017.

In a separate report, International Enterprise Singapore said non-oil exports will probably decline 3 per cent to 5 per cent this year, compared with a February projection of zero to 2 per cent expansion.

Manufacturing surge

The manufacturing sector expanded an annualized 23.3 per cent while construction grew 10.5 per cent, according to the government’s statement. That was offset by a 15.2 per cent decline in the finance and insurance industry and a 10.3 per cent drop in wholesale and retail trade.

“While sectors such as finance and insurance and wholesale trade could see a moderation in growth compared to 2015, they are still likely to provide some support to overall GDP growth for the year,” the ministry said. “In addition, tourism-related sectors may see a boost from the recovery in visitor arrivals.”

Weak growth has put company margins and the labour market under strain. Wage growth in the city state may slow to 2.5 per cent to 3 per cent this year, down from 3.5 per cent last year, the Monetary Authority of Singapore said on April 27. — Bloomberg