Singapore’s economy grew at a slower pace than expected in the first quarter, with the struggling manufacturing sector impacting tourism spending. The city-state’s economic performance is closely monitored as a measure of global conditions due to its heavy reliance on international trade.
According to the Ministry of Trade and Industry, gross domestic product (GDP) expanded by 2.7 percent year-on-year, slightly below the 3.0 percent forecasted by economists in a Bloomberg poll. The quarter-on-quarter growth was just 0.1 percent, reflecting a slower pace of expansion.
The advance estimates are based on data from January and February and may be revised with more accurate figures from March. Manufacturing in the trade-dependent economy saw a 0.8 percent increase year-on-year but declined by 2.9 percent from the previous quarter. On the other hand, the services sector, including accommodation and food, grew by 2.9 percent.
Selena Ling, chief economist at OCBC, believes that the plethora of international concerts that took place in Singapore likely boosted consumer-facing industries like hospitality and entertainment. Veteran economist Song Seng Wun anticipates an overall upward adjustment in first-quarter growth once the impact of Taylor Swift’s concerts is fully accounted for.
Furthermore, with the recent Singapore Airshow and other events contributing to spending, there could be continued positive effects in March. However, Song warns that the economy is still in a recovery phase post-pandemic. Meanwhile, the Monetary Authority of Singapore has kept its monetary policy unchanged to manage inflation and maintain the strength of the Singapore dollar, given the city-state’s reliance on imports.
Overall, while Singapore’s economy grew slower than expected in Q1 due to weak manufacturing performance and slow tourism spending from events such as Taylor Swift’s concerts, there are signs of positive growth ahead with continued support from consumer-facing industries like hospitality and entertainment as well as upcoming events contributing to spending.
