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Singapore economy grows 4.3% in Q1 in line with forecasts
SINGAPORE'S economy expanded 4.3 per cent in the first three months of 2018 on the back of strong manufacturing growth, according to Ministry of Trade and Industry (MTI) advance estimates out on Friday.
This year-on-year rise was in line with economist expectations of 4.3 per cent growth, and beat the 3.6 per cent expansion in the final quarter of 2017.
The manufacturing sector continued to be the key growth driver in the first quarter, expanding 10.1 per cent, faster than the 4.8 per cent growth in the preceding three months. All clusters within the sector saw growth, with the biggest contributors being the electronics and precision engineering clusters.
Services, which make up two-thirds of the economy, grew 3.8 per cent year-on-year in the first quarter, slightly up from the 3.5 per cent growth in the fourth quarter. Growth was primarily supported by the finance and insurance, and wholesale and retail trade sectors.
DBS economist Irvin Seah expects the economy's main engine of growth this year to switch from manufacturing to the services sector.
"While growth in the manufacturing sector will moderate as global economic conditions normalise, the strength in the services sector is likely to persist, thanks to positive spillover from the global recovery to the domestic sector," he said.
BMI Research said that despite the strong first quarter growth numbers, it is keeping to its forecast for full-year growth of 3 per cent in 2018 "as the manufacturing sector moderates and as rising interest rates present downside pressures to economic growth."
It added that the government's expansionary budget is likely to provide a degree of support.
MTI's flash estimates also showed that the construction sector remained weak, seeing a 4.4 per cent contraction, in an extension of the previous quarter's 5 per cent decline. This was due to falls in both private sector and public sector construction activities.
UOB economist Francis Tan, however, expects that the rise in en bloc activity during 2017 will support private sector construction this year.
Similarly, Mr Seah believes "the worst is over for the construction sector", citing the sector's seasonally-adjusted 4.1 per cent quarter-on-quarter growth in Q1, following four consecutive quarters of contraction.