Singapore’s economy shows slower growth in first quarter

In the first quarter, Singapore’s economy experienced slower growth than anticipated, largely due to challenges in the manufacturing sector, which in turn affected tourism spending, including from events such as Taylor Swift’s concerts.

Singapore’s economic performance is often considered a gauge of the global environment due to its heavy reliance on international trade. According to the Ministry of Trade and Industry, Gross Domestic Product (GDP) expanded by 2.7 percent year-on-year, surpassing the previous three months but falling short of the 3.0 percent forecasted in a Bloomberg economist poll.

On a quarterly basis, GDP grew by only 0.1 percent. These initial estimates are primarily based on January and February data and may be revised once March figures are available. Manufacturing, a key sector for the trade-dependent economy, increased by 0.8 percent year-on-year but contracted by 2.9 percent compared to the preceding quarter.

Meanwhile, the services sector, encompassing accommodation and food services, grew by 2.9 percent. Selena Ling, Chief Economist at OCBC, noted that international concerts, such as those by Swift, likely provided a temporary boost to consumer-facing industries like hospitality and entertainment.

Swift performed exclusively in Singapore in March as part of her Eras Tour, while Coldplay and the Singapore Airshow, Asia’s largest, took place in January and February, respectively. Song Seng Wun, an experienced economist at CGS International Singapore, anticipated a positive impact on first-quarter growth once the full effects of Swift’s concerts are factored in.

He also highlighted potential spillover effects from the Singapore Airshow into March. Despite these considerations, Song emphasized that the economy is still in a recovery phase post-pandemic.

In a separate announcement, the Monetary Authority of Singapore opted to maintain its current monetary policy for the fourth consecutive time, citing the need to manage inflation. Given Singapore’s reliance on imports, the country addresses imported inflation by allowing for a stronger Singapore dollar.

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