Gross domestic product expanded 2.6% on a seasonally adjusted basis from the previous three months, according to advance estimates Monday from the Ministry of Trade and Industry, beating a median 2.1% forecast in a Bloomberg survey of economists.
That last quarter acceleration helped propel growth for the full year to 7.2%, the fastest since 2010, after a 5.4% contraction in 2020. Economists had forecast an expansion of 7.1%, while the trade ministry in November said it expected “about 7%”.
“The Singapore economy after a robust 2021 performance is on track for normalisation,” said Selena Ling, head of treasury research and strategy at Oversea-Chinese Banking Corp.
After recovering from the worst of the pandemic, the rapid spread of the omicron variant and an economic slowdown in China — Singapore’s largest trading partner — are now clouding the outlook for the city-state, which is highly reliant on global trade.
What Bloomberg economics says
“The more important take-away from the advance estimate is that activity was able to accelerate in the face of the city-state’s largest and most deadly Covid-19 wave. That is an encouraging signal for 2022’s growth outlook, especially with omicron spreading more rapidly across Asia.” said Tamara Mast Henderson, from the Asean Economist.
Still, Singapore appears to be sticking with its gradual reopening path, with Prime Minister Lee Hsien Loong saying Friday in a New Year’s message that it can be “quietly confident” about coping with the impact of omicron.
The Southeast Asian nation expects to grow 3% to 5% this year, Lee said, reiterating an earlier forecast from the trade ministry.
The economy last quarter grew 5.9% from the same period a year ago, the trade ministry also said Monday, compared with a median estimate of 5.1% in a Bloomberg survey.
Details of the year-on-year performance by sector in 2021 include:
- Manufacturing grew 12.8% y/y, compared to 7.3% the previous year
- Construction rose 18.7%, compared to a previous contraction of 35.9%
- Services advanced 5.2%, compared to 6.9% decline in 2020