SINGAPORE - The Ministry of Trade and Industry (MTI) on Friday (Aug 11) narrowed up its forecast for economic growth this year to 2 to 3 per cent, from an earlier estimate of 1 to 3 per cent.
It announced this alongside the release of the latest Economic Survey of Singapore which showed the economy expanded 2.9 per cent in the April to June quarter compared with the same period a year earlier.
This was faster than the 2.5 per cent growth in the preceding quarter and also an upward revision from an earlier estimate of 2.5 per cent.
It means the economy grew 2.7 per cent in the first half-year.
Prime Minister Lee Hsien Loong said in his National Day message on Tuesday that the Government expects the economy to grow by around 2.5 per cent for the whole of 2017, higher than last year's growth of 2 per cent.
Growth in the second quarter was led by the manufacturing sector which continued to grow at a robust pace of 8.1 per cent year-on-year, following the 8.5 per cent expansion in the first quarter. On a quarter-on-quarter basis, manufacturing expanded by 2.9 per cent, accelerating from the 0.3 per cent growth in the previous quarter.
Looking ahead, MTI said that while downside risks remain, their potential to have a significant impact on global growth in 2017 has eased compared to three months ago. The downside risks were identified as anti-globalisation sentiments, a faster than expected tightening of US monetary policy and a steeper-than-intended pullback of credit in China.
Against this external backdrop, the manufacturing sector is likely to continue to provide support to the Singapore economy in the second half of the year, said MTI. In particular, it expects the strong performance of the electronics and precision engineering clusters to continue into the second half of the year on the back of robust global demand for semiconductors and semiconductor-related equipment, although the pace of expansion may moderate given less favourable base effects.
Likewise, externally-oriented services sectors such as the transportation & storage, wholesale trade and finance & insurance sectors are expected to benefit from the pickup in global trade.
The information & communications and education, health & social services sectors are likely to remain resilient.
On the other hand, the performance of the construction sector is expected to remain lacklustre, weighed down by the continued weakness in private and public sector construction activities.