- Second quarter GDP fell 2% q/q, compared with -1.8% estimate.
- Year-on-year growth surged 14.3%, rebounding from pandemic low.
Singapore’s economy lost momentum in the second quarter as weeks of tightened mobility restrictions weighed on this year’s expansion.
Economic growth in the three months through June contracted a seasonally adjusted 2% from the previous quarter, when the pace hit 3.1%, the Ministry of Trade & Industry said Wednesday. The median estimate among 15 economists surveyed by Bloomberg was for a quarterly contraction of 1.8% as the city-state reimposed restrictions to stem a fresh wave of Covid-19 infections.
In absolute terms, the economy in the second quarter remained 0.9% below its level from the same period in 2019, before the pandemic, according to the ministry.
“The economy will definitely be above pre-pandemic levels by the full year,” said Chua Hak Bin, senior economist at Maybank Kim Eng Research Pte. in Singapore. “Singapore is on a stronger footing compared with the rest of the neighborhood -- the Covid situation is under control and vaccinations are much higher. Singapore can start strategizing on how it’s going to reopen its economy and borders.”
Policy makers expect Singapore’s economy to grow at least 4%-6% this year after it suffered its worst contraction last year since independence in 1965. The official forecast for full-year growth is due to berevisednext month.
The city-state’s economy has been buoyed during the pandemic by robust exports and a resilient financial-services industry, while more tourism-reliant sectors such as hospitality and food and beverage continue to suffer.
The Singapore dollar was little moved by the data, trading at 1.3561 to the U.S. dollar as of 8:06 a.m.
New Outbreak
After months of success limiting outbreaks, Singapore was forced totighten restrictionsin mid-May tocurb the spreadof the virus, halting dining-in at restaurants and limiting social gatherings.
The outlook will depend largely on whether Singapore is able to meet vaccination targets in the months ahead and keep the Covid caseload low. The government aims to havetwo-thirdsof the population fully vaccinated by National Day on Aug. 9.
Wednesday’s advance release marks the government’s first look at the economy’s performance in the second quarter, based mainly on data from April and May. More data in coming weeks will firm up the picture for final second-quarter figures in late August.
Other highlights from the GDP release:
- Manufacturing shrank 1.8% from the prior three months and grew 18.5% year-on-year
- Construction was down 11% QoQ and up 98.8% YoY
- Services industries dropped 1% from Q1 and expanded 9.8% from the same time last year