While Singapore’s annualized GDP grew at a faster pace in Q1 quarter-on-quarter at 3.8%--higher than the government’s estimate of 2%, the economy only rose 1.2% year-on-year, the slowest since Q2 2009 and below the government’s expectation of 1.3%
During a press conference on Tuesday morning, MTI permanent secretary Gabriel Lim said the US-China trade tension has had so far a somewhat modest impact on economy.
The export-reliant city state expects its key outward-oriented sectors to slow this year, with manufacturing to see a sharp slowdown after two years of robust expansion.
Making up one-fifth of Singapore’s economy, manufacturing shrank year-on-year by 0.5% in Q1. This is the first contraction of the sector in three years and the sector grew 4.6% in the last quarter.
The wholesale and retail trade sector also worsened with a 1.8% year-on-year decline in the same period, compared with the 0.8% drop in the last quarter.
The construction sector fared better, having its first quarter of year-on-year growth after 10 consecutive quarters of decline.
It expanded by 2.9% year-on-year in Q1, versus the 1.2% drop in the previous quarter.
The information and communications section—seen by the MTI as one of the “pocket of strength”—grew 6.6% year-on-year in Q1, faster than the 5% a quarter ago.
The Monetary Authority of Singapore said its current policy stance “remains appropriate” against a cautious assessment of GDP growth and inflation prospects.
Last month, the central bank kept its exchange rate-based monetary policy unchanged after tightening twice last year.