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Singapore’s Economic Growth Slows To 1.3% In Q1

The Singapore economy expanded 1.3 percent year-on-year during the first quarter of 2019, down from the 1.9 percent growth registered in the fourth quarter of 2018, showed advance estimates by the Ministry of Trade and Industry (MTI).

On a quarter-on-quarter seasonally-adjusted annualised basis, the economy grew two percent, faster than the previous quarter’s 1.4 percent growth.

Specifically, the manufacturing sector contracted 1.9 percent year-on-year in Q1 2019, while the services producing industries expanded 2.1 percent year-on-year.

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The construction sector also recorded a 1.4 percent year-on-year increase, a reversal from the one percent decline seen in the previous quarter. It also marked the first quarter of positive growth for the sector following 10 consecutive quarters of decline.

“The recovery of the sector was supported by an improvement in private sector construction activities,” said MTI.

On a quarter-on-quarter seasonally-adjusted annualised basis, the sector expanded 7.8 percent, extending the 5.1 percent growth posted in the preceding quarter.

DBS senior economist Irvin Seah noted that the construction sector has finally come out of recession, reported Channel News Asia.

“Although residential construction activities remain sluggish, impetus from a healthy pipeline of infrastructure projects is gradually taking effect. Expect better showing from this sector in the coming quarters.”

Given the less rosy outlook, some economists downgraded their full year growth forecasts for the city-state.

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OCBC revised its 2019 GDP growth forecast to 1.8 percent to two percent, while DBS lowered it to 2.6 percent.

“We believe the economy has reached the bottom of the current growth cycle,” said Seah. “We expect a steady pick-up in growth performance in the coming quarters, as economic outlook improves.”

This comes as a slew of policy stimulus was rolled out by China as well as a stable monetary policy by global central banks – providing the uplift in global economic conditions.

“This should bring about a significantly stronger second half compared to the first quarter for Singapore. In short, this year will likely be back-loaded,” he said.

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