Singapore's economy grows 2.7% in first quarter of 2024

Singapore’s economy witnessed a 2.7 percent expansion in the first quarter of 2024 on a year-on-year basis, accelerating from a 2.2 percent growth in the last quarter of 2023, according to advance estimates released by the Ministry of Trade and Industry (MTI) on Friday.

Despite global economic uncertainties, the local economy has shown resilience, supported by diverse sectoral performances. The growth rate, although modest on a quarter-on-quarter basis at 0.1 percent, extended the 1.2 percent expansion seen in the final quarter of 2023.

Diverging Sectoral Trends

The manufacturing sector, often seen as a bellwether for the broader economy, grew by 0.8 percent year-on-year but has shown signs of strain, contracting by 2.9 percent on a quarter-on-quarter basis. The sector's performance was mixed, with advances in the chemicals, precision engineering, and transport engineering clusters being overshadowed by declines in electronics, biomedical manufacturing, and general manufacturing.

The construction sector proved more robust, expanding by 4.3 percent compared to the same period last year, albeit at a slower pace than the 5.2 percent growth observed in the preceding quarter. The growth was significantly buoyed by public sector projects, even as private sector output saw a downturn. However, the sector experienced a 1.7 percent contraction on a quarter-on-quarter basis.

Services Sector Showcases Strong Growth

The services sector emerged as a strong growth driver, particularly the wholesale & retail trade and transportation & storage sectors, which together accelerated to a 2.7 percent increase year-on-year from just 1.0 percent in the previous quarter. Notably, all sub-sectors within this group reported growth during the quarter.

Additionally, the combined sectors of information & communications, finance & insurance, and professional services registered a 4.2 percent increase year-on-year, up from 3.6 percent in the prior quarter. The surge in demand for IT and digital solutions, alongside robust banking and financial services activity, contributed significantly to this growth.

Conversely, these sectors faced a sharp 4.2 percent contraction on a quarter-on-quarter basis, indicating potential volatility in these high-growth areas.

MTI will release its preliminary GDP estimates for the first quarter of 2024, including a detailed analysis of sector performances, sources of growth, and other economic indicators in the Economic Survey of Singapore, scheduled for release in May 2024.