Singapore’s Economy Does Well in Q1, but Government Warns of Uncertain Future

Singapore's economy performed quite a lot better in Q1 than initially expected and the government has maintained its growth forecast for the year, but did mention that future recovery is very uncertain in light of the COVID-19 pandemic.

GDP grew 1.3% year-on-year in Q1, the Ministry of Trade and Industry (MTI) said on Tuesday, higher than the 0.2% growth seen in the government's advance estimate. MTI maintained its GDP growth forecast for 2021 at 4% to 6% for now, but warned of a degree of uncertainty caused by the pandemic as well as new domestic curbs against the virus. The outlook will be reviewed in August.

While it is possible that the Singapore economy will outperform the growth forecast for 2021 if external demand exceeds expectations, there are also significant risks. "The pace of recovery of the various sectors of the economy is likely to be more uneven than earlier expected”,  said Gabriel Lim, permanent secretary for trade and industry.

Singapore has this month re-imposed some restrictions on social gatherings, the toughest since exiting a lockdown last year in an effort to curb  a recent spike in local COVID-19 infections. "A lot of the exuberance we had in the first quarter, that's kind of being rolled back a little bit”, said Selena Ling, head of treasury research and strategy at OCBC Bank.

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