SINGAPORE – The Singapore economy grew in the second quarter at a record pace due to a low year-ago base effect when the Covid-19 pandemic plunged the economy into its worst recession.
Gross domestic product (GDP) expanded 14.3 per cent on a year-on-year basis in the second quarter of 2021, the Ministry of Trade and Industry (MTI) said on Wednesday (July 14).
The strong growth was largely due to the low base in the second quarter of 2020 when GDP plunged by 13.3 per cent due to the circuit breaker measures implemented from April 7 to June 1 last year, MTI said.
However, on a quarter-on-quarter seasonally-adjusted basis, the Singapore economy contracted by 2 per cent in the second quarter of 2021, a reversal from the 3.1 per cent growth in the preceding quarter.
The quarter-on-quarter dip in GDP was expected because of tightened Covid-19 restrictions during Singapore’s phase two (heightened alert), which stretched from May 16 to June 13.
The flash figures for the second quarter however are lower than the forecasts of economists polled by Bloomberg who predicted year-on-year growth of 14.8 per cent and a quarter-on-quarter decline of 1.8 per cent.
In absolute terms, GDP in the second quarter remained 0.9 per cent below its pre-pandemic level in the second quarter of 2019, MTI said.
MTI has maintained its full-year 2021 growth forecast of 4.0 to 6.0 per cent made first in November 2020. The full-year forecast will be reviewed again in August.
Despite the recent tightened Covid-19 restrictions, economists have said Singapore’s recovery remains on track, driven by manufacturing and exports, sectors more immune to the curbs.
Thanks to an accelerated pace of vaccination, private-sector economists last month raised Singapore’s 2021 growth forecast again to 6.5 per cent.
Singapore’s manufacturing output grew for a seventh consecutive month in May, increasing 30 per cent year-on-year – the biggest increase since November 2010.
Enterprise Singapore (ESG) also in May said non-oil domestic exports (Nodx) are now expected to expand between 1 per cent and 3 per cent for the year, up from 0 per cent to 2 per cent.
