SINGAPORE - Singapore's economic growth is likely to come in above 2 per cent this year on the back of an improving global outlook, the Trade and Industry Ministry (MTI) said on Thursday (May 25).
Global growth is expected to pick up this year compared with 2016 due to more robust activity in advanced economies, the ministry added.
It released its updated outlook alongside final figures for the first three months of the year, which showed the Singapore economy expanded 2.7 per cent year-on-year in the January to March quarter lifted largely by a resurgent manufacturing sector.
This was slightly stronger than previous estimates of 2.5 per cent growth.
Despite improving global prospects, MTI warned that risks remain.
Rising anti-globalisation sentiments could adversely impact global trade if they result in increased protectionism. In addition, political uncertainties remain, including the outcome of Britain's Brexit negotiations.
Lending conditions may also tighten further in China amidst efforts to contain leverage and risks in the financial system. Should there be a steeper-than-intended pullback in credit, investment spending and hence growth in China could slow down more sharply than expected, MTI said.
This means Singapore's trade-related sectors, such as the manufacturing and transportation and storage sectors, are likely to provide support to the economy in 2017.
In particular, growth in the electronics and precision engineering clusters is expected to remain strong for the rest of the year on the back of the recovery in global demand for semiconductors and semiconductor manufacturing equipment.
The transportation and storage sector is also likely to benefit from the projected improvement in global trade flows, the ministry noted.
Meanwhile, the information & communications and education, health and social services sectors are expected to remain resilient.
However, cautious consumer sentiments amid sluggish labour market conditions are likely to weigh on the food services and retail trade segments, while the construction sector is expected to be adversely affected by the weakness in private sector building activities.