As published on asia.nikkei.com, Thursday 25 May, 2023.
The Singaporean economy expanded 0.4% in the January-March quarter from a year ago, according to revised figures released on Thursday, up from a 0.1% expansion predicted last month.
The country maintained its forecast economic growth rate this year at between 0.5% and 2.5%, with growth likely to come in at around the mid-point of that range.
"Growth was weighed down by the manufacturing, wholesale trade and finance and insurance sectors, which contracted amidst weakness in the global economy and the electronics downcycle," Gabriel Lim, permanent secretary for Singapore's Ministry of Trade and Industry, told an online briefing on Thursday, adding, "downside risks in the global economy have risen."
"These include the impact of recent banking stresses abroad on global financial conditions, as well as the risk of escalations in the war in Ukraine and geopolitical tensions among major global powers," Lim said.
The latest GDP figures show Singapore's growth having slowed to its weakest pace after the economy recovered from a pandemic-induced contraction in the January-March quarter of 2021. In the previous quarter, October-December 2022, the economy grew 2.1%.
Singapore's aviation and tourism-related industries have benefited from the region's economic reopening. But the manufacturing sector, most notably in electronics, faced weaker exports demand to major trading partners like China and Taiwan.
The manufacturing industry shrank 5.6% in the first quarter from a year ago while the services producing industries grew by 2% year-on-year.
Singapore's performance signals spotty recovery from the COVID-19 pandemic in the 10-member Association of Southeast Asian Nations.
Indonesia earlier this month beat analysts' expectations when it posted a 5.03% expansion for the January-March quarter while Malaysia's economy grew 5.6% on the year in the same period, outperforming economists' projections.
Meanwhile, Vietnam's GDP growth of 3.3% in the first quarter caught some analysts off guard. The figure was far below forecasts and marked a reversal for what was recently Asia's fastest-growing economy.
The Asian Development Bank in an April report noted that growth in Southeast Asia is normalizing after a sharp rebound last year. The report said that countries where tourism accounts for a large share of GDP will benefit from the return of tourists from a recently reopened China, but that tight monetary conditions may offset such prospects.
"The subregion is expected to grow by 4.7% in 2023, down from 5.3% last year," the ADB report said. "Weak exports will also drag growth, as demand from advanced economies continues to shift away from goods, particularly electronics, and back to services."