Singapore’s Trade and Industry Ministry on Wednesday upped its 2021 economic growth forecast from 4-6 per cent to 6-7 per cent on the back of a “stronger than expected” domestic economy.
The ministry also expects the city-state’s “outward-oriented sectors” to do well after a 3.1-per-cent jump in trade during the second quarter, pushed in part by what government agency Enterprise Singapore said was “strong global semiconductor demand.”
The ministry said gross domestic product shrank by a less-than-expected 1.8 per cent in the second quarter, after early estimates last month pointed to a 2-per-cent quarter-on-quarter fall in what is South-East Asia’s wealthiest nation per capita.
The contraction is expected to be a blip after 9 months of growth, which in turn followed a 13-per-cent collapse in the second quarter last year during Singapore’s sole pandemic lockdown.
The mid-year turnaround last year was not enough to prevent a record 5.6-per-cent GDP contraction in 2020.
The recovery, like this year’s exports boom, was driven by demand for Singapore’s electronics and medical exports.
However this “will probably soften further ahead as vaccines help a shift back to normality in key export markets,” according to Alex Holmes of research consultancy Capital Economics.
Singapore largely reopened more than a year ago, though it has intermittently reimposed some curbs in response to low but fluctuating coronavirus case numbers.
Due to its affluence, Singapore has come through the pandemic relatively unscathed, with one of the world’s lowest death tolls at 42, and with most of its recorded 65,000 cases dating from over a year ago.
