Singapore economy grows 7.1% in third quarter, full-year GDP growth narrows to around 7%: MTI
SINGAPORE: Singapore’s economy grew 7.1% year-on-year in the third quarter of 2021, beating expectations, but still slower than the 15.2% growth recorded in the previous quarter.
Analysts had expected a 6.5% increase for the third quarter, according to a Reuters poll.
In data released on Wednesday, November 24, the Ministry of Trade and Industry (MTI) also cut the GDP growth forecast for 2021 to around 7%, down from 6-7% previously.
This is based on the performance of Singapore’s economy in the first three quarters of the year, as well as the latest external and domestic economic developments, the ministry said.
GDP growth in the first three quarters of 2021 stood at 7.7%.
The 15.2% figure in the second quarter was “largely due to the low base” in the same quarter of 2020, when GDP fell 13.3% due to the circuit breaker measures put in place from April 7 to June 1, as well as the sharp decline in external demand during the COVID-19 pandemic.
“These factors would also explain the strong year-over-year growth seen in the second quarter of 2021 for sectors such as construction, retail and food services (F&B),” MTI said.
All manufacturing clusters except the biomedical manufacturing cluster expanded in the third quarter.
The manufacturing sector grew 7.2% year-on-year, following growth of 17.9% in the previous quarter.
Electronics and precision engineering clusters, in particular, continued to show “healthy growth” amid “robust” global demand for semiconductors and semiconductor equipment, respectively.
The construction sector grew 66.3% year-on-year, slowing from the 117.5% growth in the previous quarter as construction output from both the public and private sectors increased.
“The strong growth in the quarter was mainly due to weak base effects given the slow recovery in construction activity after the breaker period last year,” MTI said.
The wholesale sector grew 5.9% year-on-year, led by the machinery, equipment and supplies segment. This development was in turn stimulated by strong wholesale sales of electronic components, telecommunications equipment and computers.
The retail sector grew 0.7 percent, supported by an increase in non-motor vehicle sales volumes, although motor vehicle sales fell due to a reduction in entitlement certificate quotas ( THIS).
Growth in the transportation and warehousing sector slowed to 8.2% year-on-year. Within the industry, the airline segment experienced strong growth, mainly due to an increase in the number of air passengers handled from a low base in the same quarter in 2020.
However, the water transport segment “grew slightly”, due to slower growth in the volume of ocean freight handled at Singapore ports, MTI said.
The accommodation industry fell 4.1 percent annually, a reversal from the 15.8 percent growth in the previous quarter.
“The performance of the sector has been weighed down by continued weakness in visitor arrivals due to travel restrictions, although the government’s demand for hotel rooms serving as quarantine facilities has provided some support to the sector,” he said. said MTI.
The food and beverage (F&B) sector fell 4.2% year-on-year, compared to growth of 36.9% in the second quarter.
Industry performance was “negatively” affected due to tighter catering and event restrictions during the quarter, including unauthorized catering services during the phase 2 period (heightened alert).
“In particular, restaurants and caterers have experienced declining sales volumes, even as sales volumes for fast food outlets and cafes, food courts and other food outlets have increased,” said MTI.
The information and communications industry grew 10.4% year-on-year, growth largely driven by the IT and information services segment, which benefited from “strong” demand for IT solutions from the industry. ‘business.
The finance and insurance industry grew 9% year-on-year, driven primarily by expansion in the insurance segment.
The real estate sector grew 16.8% year-on-year, mainly supported by the private residential real estate segment. However, the performance of the commercial real estate segment “continued to be slow,” MTI said.
The professional services sector grew 4.4% year-on-year. Growth was primarily driven by the architecture and engineering, technical testing and analysis, and other professional, scientific and technical services segments.
The administrative and support services sector declined 1.3% year-on-year. Within the industry, the rental and leasing segment contracted due to travel restrictions affecting the rental and leasing of air transport equipment.
“Other service industries” grew 4.4% year-on-year.
Within the sector, the segments of education, health and social services, public administration and defense, as well as “others” grew.
“Other” segments in other service industries include membership organizations, repair of computers, vehicles, and personal and household goods, as well as other personal service activities such as personal care, weddings. and funerals.
However, the arts, entertainment and recreation segment contracted. This was due to the reintroduction of phase 2 measures (enhanced alert), the gradual relaxation of restrictions thereafter, as well as the slow resumption of visitor arrivals.