The Ministry of Trade and Industry (MTI) also upgraded the gross domestic product (GDP) growth forecast for 2021 to 6 to 7 per cent, up from 4 to 6 per cent projected previously.
With COVID-19 pandemic situation stablising, Singapore on Wednesday reported 14.7 per cent year-on-year economic growth in the second quarter of 2021, faster than the 1.5 per cent growth in the previous quarter. The Ministry of Trade and Industry (MTI) also upgraded the gross domestic product (GDP) growth forecast for 2021 to 6 to 7 per cent, up from 4 to 6 per cent projected previously.
This is based on the “better than expected” performance of the Singapore economy in the first half of the year, as well as the latest external and domestic economic developments, MTI said.
The strong second-quarter growth was largely due to the low base in the same period last year GDP fell by 13.3 per cent as a result of the circuit breaker (COVID-safety) measures implemented from April 7 to June 1, 2020, as well as the sharp fall in external demand amid the COVID-19 pandemic.
With the COVID-19 situation in Singapore stabilising and the country’s vaccination programme on track, “Singapore’s economy is expected to continue to see a gradual recovery in the second half of the year, supported in large part by outward-oriented sectors,” the Channel News Asia quoted the ministry as saying.
The progressive easing of domestic and border restrictions will also play a part in supporting the recovery of Singapore’s consumer-facing sectors and alleviate labour shortages in sectors that are reliant on migrant workers, the Channel cited MTI release. Sharp improvements across all clusters in the manufacturing sector supported the overall expansion in the April to June period.
The constructor sector, led by an expansion of public and private projects, was also a big growth driver. It expanded 106.2 per cent from the same period last year, a big turnaround from the 23.2 per cent fall in the previous quarter.
Singapore has started reopening its economy from Tuesday (Aug 10) in stages, easing restrictive measures implemented to control the spread of deadly coronavirus. The authorities are allowing dining in to resume and raising group sizes to five for those who have been fully vaccinated. Work-from-home rules are expected to ease next week.
Gabriel Lim, permanent secretary for trade and industry, said the progressive easing of domestic and border restrictions amid rising vaccination rates in Singapore will also help to support the recovery of consumer-facing sectors and alleviate labour shortages in sectors that are reliant on migrant workers, such as construction and marine engineering. However, the recovery will remain uneven with tourism- and aviation-related sectors projected to recover more slowly than previously expected.
”Even though domestic border restrictions may be eased towards the later part of the year, demand is not expected to return quickly as travel restrictions globally are likely to be lifted cautiously,” The Straits Times quoted Lim as saying. (Singapore borders are closed to control infections among foreign visitors).
The MTI said while COVID-19 cases continue to be on the rise globally due to the spread of the highly transmissible Delta variant, vaccination rates have also picked up in key advanced economies such as the United States and the eurozone, which have in turn allowed them to press on with their reopening plans.
In contrast, regional economies, which have been slow to vaccinate their populations, have had to reimpose restriction measures to curb a resurgence in infections. This has in turn dampened their growth outlook, MTI said. “On balance, the recovery in external demand for Singapore for the rest of the year remains largely on track,” MTI said.