Singapore

Singapore economy grows 7.1% in Q3, full-year GDP growth narrowed to about 7%: MTI


SINGAPORE: Singapore’s economy grew by 7.1 per cent year-on-year in the third quarter of 2021, beating expectations, however nonetheless slower than the 15.2 per cent growth recorded in the earlier quarter.

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Analysts had anticipated a 6.5% improve for Q3, in accordance to a Reuters ballot.

In information launched on Wednesday (Nov 24), the Ministry of Trade and Industry (MTI) additionally narrowed the GDP growth forecast for 2021 to about 7 per cent, from the earlier 6 to 7 per cent. 

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This relies on the efficiency of the Singapore economy in the primary three quarters of the 12 months, in addition to the newest exterior and home financial developments, stated the ministry. 

GDP growth in the primary three quarters of 2021 got here in at 7.7 per cent.

The Q2 determine of 15.2 per cent was “largely due to the low base” in the identical quarter of 2020 when GDP fell by 13.3 per cent due to the Circuit Breaker measures put in place from Apr 7 to Jun 1, in addition to the sharp fall in exterior demand throughout the COVID-19 pandemic. 

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“These factors would also explain the strong year-on-year growth seen in the second quarter of 2021 for sectors such as construction, retail trade and food & beverage (F&B) services,” stated MTI. 

All clusters throughout the manufacturing sector, except for the biomedical manufacturing cluster, expanded throughout the third quarter. 

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The manufacturing sector grew by 7.2 per cent year-on-year, moderating from the 17.9 per cent growth in the earlier quarter. 

The electronics and precision engineering clusters, in specific, continued to submit “healthy growth” amid “robust” world demand for semiconductors and semiconductor gear respectively. 

The development sector rose by 66.3 per cent year-on-year, slowing from the 117.5 per cent growth in the earlier quarter, as each private and non-private sector development output rose. 

“The strong growth during the quarter was mainly because of low base effects given the slow resumption of construction activities after the Circuit Breaker period last year,” stated MTI. 

The wholesale commerce sector grew by 5.9 per cent year-on-year, led by the equipment, gear and provides section. This was in flip bolstered by the robust wholesale gross sales of digital elements, telecommunications gear and computer systems. 

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The retail commerce sector grew by 0.7 per cent, supported by a rise in non-motor automobile gross sales volumes, at the same time as motorized vehicle gross sales fell due to a discount in Certificate of Entitlement (COE) quotas. 

Growth in the transportation and storage sector slowed to 8.2 per cent year-on-year. Within the sector, the air transport section recorded robust growth, primarily due to a rise in air passengers dealt with from a low base in the identical quarter in 2020. 

However, the water transport section “grew marginally”, due to slower growth in the amount of sea cargo dealt with at Singapore’s ports, stated MTI. 

The lodging sector fell 4.1 per cent 12 months, a reversal from the 15.8 per cent growth in the earlier quarter. 

“The performance of the sector was weighed down by continued weak visitor arrivals due to travel restrictions, even though demand from the government for hotel rooms to serve as quarantine facilities provided some support to the sector,” stated MTI. 

The meals and beverage sector (F&B) fell 4.2 per cent 12 months on 12 months, in contrast to the 36.9 per cent growth in the second quarter. 

The sector’s efficiency was “adversely” affected due to tighter dine-in and occasion restrictions throughout the quarter, together with dine-in companies not allowed throughout the Phase 2 (Heightened Alert) interval. 

“In particular, restaurants and food caterers saw a fall in sales volumes, even as the sales volumes of fast food outlets, and cafes, food courts and other eating places rose,” stated MTI. 

ECONOMIC OUTLOOK FOR 2021 

“Since the Economic Survey of Singapore in August, the global economy has performed broadly in line with expectations,” stated MTI. 

Domestically, journey and home restrictions have “continued to weigh” on the restoration of aviation- and tourism-related sectors similar to air transport and the humanities, entertainment and recreation sectors, in addition to the F&B sector and retail commerce sector. 

However, growth in sectors similar to electronics, in addition to finance and insurance coverage, has been stronger than anticipated, bolstered by “robust” demand for semiconductors, and insurance coverage and fund administration companies.

The latest easing of border restrictions on the entry of migrant staff from South Asia and Myanmar can even alleviate a few of the ongoing labour shortages in the development and marine and offshore engineering sectors, and assist their restoration, stated the ministry. 


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