S'pore economic growth exceeds expectations
MTI: Uptick last year largely driven by manufacturing sector
Singapore's economy grew by 2 per cent last year, slightly above the estimate of 1.8 per cent.
On a quarter-by-quarter basis, the economy expanded by a whopping 12.3 per cent, according to statistics released by the Ministry of Trade and Industry (MTI) yesterday.
The uptick was largely driven by the manufacturing sector and the "other services" industries. The economy is expected to grow at a "modest" pace of 1 per cent to 3 per cent this year, said MTI.
MTI permanent secretary Loh Khum Yean said at a press conference yesterday that the global economy is projected to pick up slightly on the back of higher growth in the US and key Asean countries.
But there are challenges that a small and open economy like Singapore faces, such as signs of rising anti-globalisation sentiment and the lack of clarity on the policies of the new US administration.
If monetary conditions tighten further in China, investment and growth there would also slow down more sharply than expected, he added.
Here is a breakdown of the performance of key sectors:
The manufacturing sector grew by 3.6 per cent last year, a reversal from the 5.1 per cent decline in 2015.
This recovery is largely driven by the growth in the electronics, biomedical manufacturing and precision engineering clusters.
The strong growth in electronics is due to the increase in global demand for semiconductors, said MTI economics director Yong Yik Wei.
OCBC Bank economist Selena Ling said the near-term momentum in manufacturing and exports should hold up due to the green shoots in the global and regional manufacturing Purchasing Managers' Index data, as well as growth stabilisation within Asia.
After manufacturing, the education, health and social services segment was the second largest contributor to gross domestic product growth, and grew by 3.1 per cent last year.
The finance and insurance sector grew by 0.7 per cent last year, far slower than the 5.7 per cent growth registered in 2015.
The business services sector also faced a slump and shrank by 0.9 per cent last year. It is largely due to the real estate segment, which was dampened by the slowdown in the property market.
Sectors such as the retail and food services are likely to face headwinds this year due to consumer sentiment, said MTI.
The sector expanded by 0.2 per cent last year, moderating from the 3.9 per cent growth in the previous year.
Demand last year was driven by public projects such as the Thomson-East Coast Line, but there were declines in the residential, industrial and institutional segments.