Singapore releases first quarter GDP advance estimates, financial coverage

A person with a masks on taking a stroll at Marina Bay Sands in Singapore’s central enterprise district seen within the background on April 1, 2020.

Suhaimi Abdullah | Getty Photos

SINGAPORE — Singapore’s financial system grew for the primary time for the reason that outbreak of Covid-19.

The Southeast Asian financial system expanded by 0.2% within the first quarter of 2021 from a yr in the past, official advance estimates confirmed on Wednesday. That is the nation’s first financial development for the reason that fourth quarter of 2019.

Analysts polled by Reuters had anticipated the Singapore financial system to shrink 0.2% within the first quarter from a yr in the past.

On a quarter-on-quarter seasonally adjusted foundation, the financial system expanded by 2%, Singapore’s Ministry for Commerce and Business stated in an announcement.

This is how the completely different industries carried out within the first three months of 2021:

  • Items-producing industries grew 3.3% from a yr in the past, helped by a 7.5% enlargement in manufacturing output.
  • However development continued to contract, although at a slower tempo of 20.2% in contrast with 27.4% within the earlier quarter.
  • In the meantime, services-producing industries contracted by 1.2% on a year-on-year foundation.

Alex Holmes, Asia economist at consultancy Capital Economics, stated the Singapore financial system ought to proceed to get better within the coming quarters.

“The export sector is ready to stay robust, on the again of buoyant international demand for semiconductors, superior manufacturing gear and pharmaceutical elements,” he stated in a word following the newest knowledge launch.

The primary headwind the Singapore financial system faces is strict journey restrictions, stated Holmes. He stated reopening of the border will doubtless be a gradual course of, so persistent weak point within the aviation in addition to retail and hospitality sectors will maintain again the restoration.

Singapore reported its worst ever financial recession final yr when it contracted 5.4% as lockdown measures globally to gradual the unfold of Covid-19 prompted a plunge in exercise.

Central financial institution maintains coverage

In a separate launch, the Financial Authority of Singapore — the nation’s central financial institution — stated it saved its coverage unchanged.

The MAS manages financial coverage via setting the trade price, slightly than rates of interest, by permitting the Singapore greenback to rise or fall inside an undisclosed band in opposition to a basket of currencies. It adjusts the band via three levers: the slope, the mid-point and the width.

On Wednesday, the central financial institution stated it saved its coverage band — referred to as the Singapore greenback nominal efficient trade price — at a 0% price of appreciation each year. The width and mid-point of the band remained unchanged, it stated.

Explaining its coverage stance, the MAS stated despite the fact that the Singapore financial system will proceed to develop, the sectors worst hit by the Covid disaster will proceed to battle.

It added that core inflation is forecast to rise “solely progressively” by 0% to 1% this yr. Core inflation strips out lodging and personal transport, and is the popular worth gauge of the MAS.

The central financial institution stated Singapore’s financial development for 2021 will doubtless exceed the higher finish of the official 4% to six% forecast vary, barring a setback to the worldwide financial system.

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