Singapore Q1 GDP grows 2.6%, beating estimates, but future growth uncertain: Economists

First quarter construction activity grew 3.1 per cent from a year ago, due to a pick-up in private sector construction work. -- ST PHOTO: DANIEL NEO 
First quarter construction activity grew 3.1 per cent from a year ago, due to a pick-up in private sector construction work. -- ST PHOTO: DANIEL NEO 

SINGAPORE - The Singapore economy grew 2.6 per cent in the first three months of 2015 over the same period a year ago, beating the 2.1 per cent advance estimate released in April.

Economists cheered the stronger numbers, but warned that future growth is still shaky amid an uncertain global outlook

"The most obvious let down is the negative labour productivity growth," said SIM Global Education economist Tan Khay Boon said.

"It is not clear then when Singapore can have a meaningful increase in labour productivity which is needed for sustainable growth."

JP Morgan economist Benjamin Shatil noted that growth was uneven across major sectors.

First quarter construction activity grew 3.1 per cent from a year ago, due to a pick-up in private sector construction work. But this activity is "unlikely to persist" as the property market continues to slow, said Mr Shatil.

First quarter retail sales grew 4.1 per cent from a year ago, but Mr Shatil is sceptical that the underlying trend in spending is firming.

"We think the rise in consumer spending reflected strength in car sales that benefitted from some relief in COE (certficate of entitlement) permit prices in the first quarter," he said.