Singapore’s economy grew at a faster pace in the third quarter than initial estimate

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View of the Singapore skyline.

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SINGAPORE — Singapore’s economy expanded at a faster pace in the third quarter than initially estimated, while the government expects 2021 growth to come in at around 7%.

The Singapore economy grew 7.1% in the third quarter compared with a year ago, the Ministry of Trade and Industry said Wednesday.

That was better than the official advance estimate of 6.5% year-on-year growth that the ministry projected last month. But it’s slower than the 15.2% year-on-year growth recorded in the second quarter.

On a quarter-on-quarter, seasonally adjusted basis, the Singapore economy expanded by 1.3% in the third quarter — a turnaround from the 1.4% contraction in the second quarter, said the ministry.

Here’s how the various sectors performed in the third quarter:

  • Manufacturing grew by 7.2% from a year ago. All clusters within the sector expanded, except for the biomedical manufacturing cluster.
  • Construction expanded by 66.3% on year, mainly due to a low base of comparison as output in both public and private sectors rose in the third quarter.
  • Among services industries, real estate grew by 16.8% on year, supported primarily by activity in the private residential property segment.
  • Meanwhile, the food and beverage services sector shrank 4.2% from a year ago as Singapore tightened dine-in and event restrictions to curb the spread of Covid-19.

Singapore, a city-state in Southeast Asia, has been battling a surge in Covid-19 infections that came even as around 85% of the population has completed their vaccinations.

But in recent weeks, the government has gradually eased domestic and border restrictions — allowing more activity to resume.

2021 and 2022 outlook

The trade and industry ministry revised its 2021 economic growth estimates for Singapore to around 7% — the top of its previous forecast range of between 6% and 7%.

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Next year, the Singapore economy is expected to grow by 3% to 5%, said the ministry.

“The recovery of the various sectors of the economy in 2022 is expected to remain uneven,” the ministry said.

It explained that growth prospects for outward-oriented sectors such as manufacturing and wholesale trade remain strong given robust external demand.

But recovery in sectors related to aviation and tourism is likely to be gradual as global travel demand will take time to recover and travel restrictions could persist in key visitor source markets, it added.

The ministry warned that protracted supply disruptions alongside a stronger pickup in demand, as well as rising energy commodity prices, could lead to more persistent inflation.

Singapore is a small and open economy that’s largely dependent on global trade. Core inflation in the country rose 1.5% in October from a year ago — the biggest jump in nearly three years, official data showed Tuesday.

Core inflation strips out accommodation and private transport, and is the Singapore central bank’s preferred price gauge.

Last month, the Monetary Authority of Singapore became one of the first Asian central banks to tighten monetary policy. The MAS said the move “will ensure price stability over the medium term while recognising the risks to the economic recovery.”

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