Singapore. The country is able to maintain the full-year economic growth forecast for 2022 at 3% to 5%. However, the growth is expected to settle “at the lower half” due to a weaker outlook for external demand.
The Ministry of Trade and Industry (MTI) released official data on 25 May showing how Singapore’s economy grew at a slow yet steady pace from January to March.
Based on a quarter-on-quarter seasonally adjusted basis, Singapore’s economy increased by 0.7% which was higher than the 0.4% initial estimate. However, this is lower than the 2.3% growth shown during the preceding quarter.
During the first quarter, economic growth was mainly supported by the finance and insurance, manufacturing, and professional services sectors.
According to MTI, the country’s external economic development has dwindled since the last quarterly report in February due to the onset of the Ukraine-Russia conflict which has disrupted the supply of commodities such as food and energy. In turn, this puts pressure on global inflation which is felt by many countries.
“Consequently, global supply disruptions are projected to be more severe and prolonged than earlier expected, potentially persisting throughout 2022. This, in turn, is likely to constrain production and dampen GDP growth in some external economies by more than we have previously projected,” stated MTI permanent secretary Gabriel Lim during a media briefing.
Aside from the conflict in Ukraine, significant downsides in the economy remain due to the trajectory of the market adjustments due to the pandemic.
Read: Singapore: Ongoing assessment to see if businesses need extra support amid the Ukraine Crisis
One example is how China’s economic slowdown is expected to affect the prospects of the local chemicals cluster, including the fuel and chemicals segment of the wholesale sectors, given how huge China’s market is for chemical and petroleum products from Singapore.
On the flip side, Singapore’s move to open its borders to fully vaccinated travellers is expected to boost the professional services sectors as firms can now cater more to international clients.
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Moreover, air travel and visitor arrivals are also expected to increase more than the earlier projection, which can quicken the recovery of tourist-related and aviation sectors, alongside the recreation and entertainment industries.