S’pore: More than 2pc growth possible

SINGAPORE: Singapore expects its economy to grow more than two per cent this year on improving overseas demand after gross domestic product (GDP) contracted less than initially estimated in the first quarter, but it warned of risks to the outlook from tightening financial conditions in China.

The city state has been among a number of export-reliant Asian economies to benefit from a general uptick in global demand from late last year, enjoying strong sales of its tech products.

The positive momentum saw its economy avoid a deeper slump in the first quarter, shrinking 1.3 per cent from the previous three months on an annualised and seasonally adjusted basis, compared with the government's initial estimate in April of a 1.9 per cent contraction.

The data released by the Trade and Industry Ministry yesterday was slightly worse than the median forecast in a Reuters survey of a one per cent slump.

The ministry kept its GDP forecast for the year unchanged at one to three per cent this year, but said that growth was likely to come in higher than two per cent “barring the materialisation of downside risks”, and supported by an improving outlook for advanced economies.

The government revised its export forecasts for the year to four to six per cent growth from zero to two per cent previously. In the first quarter, the manufacturing sector grew eight per cent yearon-year after a 11.5 per cent expansion in the previous quarter.

Despite the upbeat tone, however, the government warned of risks to the growth outlook from tightening financial conditions in China and policy uncertainties in the United States and Britain. Reuters