SINGAPORE – Singapore’s economy contracted by 5.4% last year, a reversal from the 1.3% growth in 2019, said the republic’s Trade and Industry Ministry (MTI).
For the fourth quarter of 2020, Singapore’s economy contracted by 2.4% on a year-on-year basis, an improvement from the 5.8% contraction in the preceding quarter, the MTI said in a statement today.
It also maintains the gross domestic product (GDP) growth forecast for 2021 at 4.0 to 6.0%.
On sectoral basis, the ministry said the manufacturing sector expanded by 7.3%, a turnaround from the 1.5% contraction in 2019, supported by robust expansions in the biomedical manufacturing, electronics and precision engineering clusters.
The construction sector, meanwhile, shrank by 35.9%, a sharp retraction from the 1.6% growth posted in 2019, weighed down by weakness in both public sector and private sector construction works.
The services producing industries contracted as well by 6.9%, reversing the 2.0% growth recorded in 2019.
The MTI said most services sectors saw a full-year contraction due to the widespread economic impact of the Covid-19 pandemic.
Key exceptions were the finance & insurance and information & communications sectors, which expanded by 5.0% and 2.1%, respectively, it said.
As for the outlook for this year, the MTI said there has been further progress in Covid-19 vaccine development and deployment, with several approved vaccines being rolled out in many economies around the world.
Although the speed of the vaccine deployment varies, advanced economies like the US and Eurozone are likely to reach population immunity by the second half of this year, which should in turn spur their economic recoveries.
On the other hand, the growth prospects for regional economies such as Malaysia and Indonesia have weakened due to the recent resurgence in infections, which has necessitated the reimposition of lockdowns and restrictions.
On balance, the ministry said as the positive developments in the key external economies broadly offset the negative ones, Singapore’s external demand outlook remains largely similar compared with three months ago.
Domestically, MTI said Singapore’s Covid-19 situation remains under control and the vaccination programme is also under way.
However, the pace of border reopenings has slowed amid the global surge in Covid-19 cases and the emergence of more contagious strains of the virus, it said.
Taking into account the developments in the global and domestic economic environment, the MTI said Singapore’s economy is expected to see a gradual recovery over the course of the year, although the outlook remains uneven across sectors. – Bernama, February 15, 2021
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