SINGAPORE, Aug 13 ― Singapore has downgraded its Gross Domestic Product (GDP) forecast for 2019 to “0.0 to 1.0 per cent” from “1.5 to 2.5 per cent” previously projected, with growth expected to come in at around the mid-point of the forecast range.
The forecast was made after taking into account the global and domestic economic environment, as well as the performance of Singapore’s economy in the first half of the year, said the republic’s Ministry of Trade and Industry (MTI) in its latest Economic Performance released today.
For the second quarter, the republic's economy grew marginally by 0.1 per cent on a year-on-year basis, moderating from the 1.1 per cent growth in the previous quarter.
MTI said on a quarter-on-quarter seasonally-adjusted annualised basis, the economy contracted by 3.3 per cent, a reversal from the 3.8 per cent growth in the first quarter.
The manufacturing sector contracted by 3.1 per cent year-on-year, sharper than the 0.3 per cent contraction in the previous quarter.
Manufacturing output was largely weighed down by declining output in the electronics, transport engineering and precision engineering clusters.
By contrast, output in the biomedical manufacturing and general manufacturing clusters rose.
The construction sector expanded by 2.9 per cent year-on-year, extending the 2.8 per cent growth in the first quarter.
Construction output was supported by public sector construction works.
The wholesale & retail trade sector contracted by 3.2 per cent year-on-year, larger than the 2.5 per cent decline in the previous quarter.
MTI said the sector’s weak performance was led by the wholesale trade segment, which shrank mainly on account of a decline in the machinery, equipment & supplies sub-segment.
The latter was in line with the fall in Singapore’s non-oil domestic exports during the quarter, especially in electronics.
Meanwhile, the retail trade segment also contracted as both motor vehicular and non-motor vehicular retail sales fell.
Growth in the transportation & storage sector picked up to 2.2 per cent year-on-year, from 0.7 per cent in the previous quarter.
The sector’s growth was supported primarily by the air transport and water transport segments, which expanded on the back of an increase in air passengers handled at Changi Airport and total sea cargo volume handled at Singapore’s ports respectively.
MTI said the accommodation & food services sector expanded by 0.9 per cent year-on-year, slowing from the 2.0 per cent growth in the previous quarter.
Growth was supported by both the food services and accommodation segments.
The food services segment expanded on account of higher sales at fast food outlets, other eating places and restaurants, while the accommodation segment grew on the back of a rise in international visitor arrivals.
The information and communications sector grew by 4.1 per cent year-on-year, easing from the 5.2 per cent growth in the previous quarter.
Growth was driven by the IT and information services segment, which expanded at a robust pace on the back of healthy demand for IT solutions.
Growth in the finance and insurance sector came in at 5.2 per cent year-on-year, faster than the 3.2 per cent expansion in the previous quarter.
The sector’s strong performance was largely due to expansions in the fund management, foreign exchange trading, and “others” segments.
The business services sector expanded by 0.5 per cent year-on-year, moderating from the 1.7 per cent growth in the preceding quarter.
Growth was supported by the professional services segment, even as the real estate segment continued to contract.
The “other services industries” grew by 2.1 per cent year-on-year, extending the 2.6 per cent growth in the preceding quarter.
Growth was primarily supported by the education, health and social services and the arts, entertainment and recreation segments.
On Economic Outlook for 2019, MTI said the global growth outlook has weakened further since May, with the IMF downgrading its global growth forecast for 2019 in its July review.
MTI said GDP growth in many of Singapore’s key final demand markets in the second half of 2019 is expected to slow from or remain similar to, that recorded in the first half.
GDP growth in the key Asean economies, however, is expected to remain resilient for the rest of the year.
Against this challenging external macroeconomic backdrop, and the deepening downturn in the global electronics cycle, the Singapore economy is likely to continue to face strong headwinds for the rest of the year.
Nonetheless, there are several areas of strength in the Singapore economy, said MTI.
Within the manufacturing sector, the aerospace and food & beverage manufacturing segments are expected to continue to do well given firm demand conditions.
Among the services sectors, the growth of the information and communications and finance and insurance sectors is projected to remain healthy, bolstered by the sustained demand for enterprise IT solutions and increased demand for payment processing services respectively.
Meanwhile, the education, health and social services segment’s growth is likely to be resilient, supported by the ramp-up of operations in healthcare facilities.
The recovery in the construction sector is also expected to be sustained, said the Ministry. ― Bernama
