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Singapore economy grew 2.7% in Q1, but growth over previous quarter was slowest in a year

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SINGAPORE - Singapore’s economy in the first three months of 2024 grew at its weakest quarter-on-quarter pace in a year as manufacturing slowed, but economists see growth strengthening ahead.

On a quarter-on-quarter seasonally adjusted basis, the economy expanded 0.1 per cent in the first quarter, down from the 1.2 per cent growth in the fourth quarter of 2023, according to advance estimates released on April 12 by the Ministry of Trade and Industry (MTI).

OCBC chief economist Selena Ling noted that quarter-on-quarter growth was the slowest since Q1 2023. It is also lower than the 0.5 per cent gain tipped by analysts in Bloomberg poll.


Compared to the same period last year, the economy grew 2.7 per cent, higher than the 2.2 per cent expansion in the fourth quarter of 2023. However, this figure also missed the Bloomberg poll’s median forecast of 3 per cent growth.

But, said Ms Ling: “Importantly, there was no change to the 2024 official growth forecast of 1 per cent to 3 per cent year on year, or to the headline and core inflation forecasts of 2.5 per cent to 3.5 per cent year on year.

“Singapore’s growth trajectory is tipped to strengthen for the subsequent quarters of 2024, predicated on an improvement in the manufacturing recovery theme, especially for electronics, and accompanied by the financial sector in anticipation that risk appetite should be buoyed by the global monetary policy easing cycle in the second half of 2024.”


Maybank economist Chua Hak Bin said the economy is cruising once again, but the growth is somewhat uneven.


He said the manufacturing and electronics recovery is weaker than expected, while services industries are buoyant because of visa waivers for China tourists, a stronger trade-related services sector, as well as a “Taylor Swift” boost.

Dr Chua also said revenge travel may lose some steam for the rest of the year even though it made a strong comeback in the first quarter.

In the services sectors, wholesale and retail trade, and transportation and storage sectors collectively grew 2.7 per cent year-on-year in Q1, up from 1 per cent the previous quarter.

Sectors comprising the information and communications, finance, insurance and professional services sectors grew 4.2 per cent year on year in Q1, faster than then the 3.6 per cent growth in the previous quarter.

MTI said growth in the information and communications sector was bolstered by continued strong demand for IT and digital solutions, while that in the professional services sector was mainly driven by the head offices and business representative offices segment.

The accommodation and food services, real estate, administrative and support services and other services sectors expanded 2.9 per cent year on year in Q1, up from 2 per cent the previous quarter.

Manufacturing growth, however, slowed to 0.8 per cent year on year in Q1, lower than the 1.4 per cent expansion in the previous quarter.

“Within the sector, output expansions in the chemicals, precision engineering and transport engineering clusters more than offset output contractions in the electronics, biomedical manufacturing and general manufacturing clusters,” MTI said.

The construction sector grew 4.3 per cent year on year in the first quarter, down from the 5.2 per cent growth the previous quarter, led by a decline in private sector construction output.

The ministry has projected that the Singapore economy would grow between 1 per cent and 3 per cent in 2024 as its trade-related sectors improve modestly.


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