Singapore updates second quarter GDP and economic forecast for full year 2021

SINGAPORE – The Singapore government raised its official growth forecast for 2021 after the economy held up stronger than expected in the first half of the year as the domestic Covid-19 situation stabilizes.

Singapore’s economy is now expected to grow between 6% and 7% this year, the Ministry of Commerce and Industry said on Wednesday. This is compared to the previous official projection range of 4% to 6%.

“Barring a major setback in the global economy, Singapore’s economy is expected to continue to experience a gradual recovery in the second half of the year, supported largely by outward-looking sectors,” the ministry said in a statement. economic update.

“The gradual easing of national and border restrictions as our immunization rates continue to rise will also help support the recovery of our consumer-oriented sectors and alleviate labor shortages in sectors that depend on human resources. migrant workers, ”he added.

Singapore has one of the fastest vaccination deployments in the world. About 72% of the Southeast Asian country’s population completed vaccination on Monday, according to data from the Ministry of Health.

This allowed the country to start easing Covid-19 measures this week, having revised those measures several times since May due to an increase in locally transmitted infections – many of which are caused by the delta plus variant. infectious.

But there are still risks that could weigh on the global economy, the ministry said.

These risks include uncertainty surrounding the trajectory of the Covid pandemic, higher than expected inflation and geopolitical uncertainty involving major economies, the ministry said.

The official economic forecast upgrade comes as Singapore’s economy grew 14.7% in the second quarter of 2021 compared to a year ago.

This is better than official preliminary estimates of a 14.3% expansion, and the 14.2% growth projected by analysts in a Reuters poll.

But compared to the previous quarter, Singapore’s economy contracted 1.8% between April and June, the Ministry of Trade and Industry said.

The ministry added that in absolute terms, the country’s gross domestic product remained 0.6% lower than in the second quarter of 2019 – before the Covid-19 pandemic.

Here is the performance of the different sectors in Singapore in the second quarter:

• The manufacturing sector was up 17.7% from a year ago, with the transportation engineering and precision engineering clusters recording the largest increases in output.
• Construction has more than doubled from a year ago, largely thanks to a low base of comparison as most activities were put on hold during a partial lockdown last year.
• Service-producing industries grew 10.3% year-over-year, with retail trade increasing 50.7% year-on-year.