Singapore: GDP seen expanding 6.5% in 2021 – UOB

Economist at UOB Group Barnabas Gan comments on the growth prospects for Singapore this year.

Key Quotes

“Based on the advance estimates by the Ministry of Trade and Industry (MTI), Singapore’s 2Q21 GDP expanded by 14.3% y/y (-2.0% q/q sa).”

“Manufacturing growth underpinned the overall economic recovery in 2Q21, expanding by 18.5% y/y… With the advance estimates for manufacturing growth at 18.5% y/y, this should translate into another stellar performance for industrial production in June 2021, where we expect it to grow by 27.4% y/y.”

“Encouragingly, the construction and services sectors expanded by 98.8% y/y and 9.8% y/y in 2Q21 respectively, as the economy recovers from the COVID-19 pandemic amid a very low base effect in 2Q20.”

“Singapore’s economy has been supported by the favourable export environment since the start of this year.”

“Accounting for the economic performance in 2Q21, Singapore’s economy has expanded by 7.4% y/y in the first half of 2021. Moreover, the growth pace in 2Q21 at 14.3% y/y (-2.0% q/q sa) has surpassed our call of +12.4% y/y (-3.6% q/q sa). Owing to the surprisingly strong performance in 2Q21 amid a rosier economic prognosis ahead, we upgrade our full-year 2021 growth outlook to 6.5%, from our prior forecast of 5.5%.”