The Monetary Authority of Singapore's latest macroeconomic review released on Wednesday points to stronger economic recovery going forward, but this is subject to several caveats and uncertainties. The good news is that the gross domestic product growth this year is likely to exceed the upper end of the official 4 per cent to 6 per cent forecast and overall output is already back to pre-pandemic levels. There is also encouraging news on the labour market. Advance estimates from the Ministry of Manpower showed the unemployment rate, which peaked at 3.5 per cent last September, continued to decline, to 2.9 per cent last month. The number of retrenchments also fell for the second consecutive quarter. Generous government support packages over five Budgets have contributed significantly to these positive outcomes.

The not-so-good news is that the recovery remains highly uneven. Sectors less affected by the Covid-19 recession, which include finance and insurance, information and communications, trade-related and some domestic-oriented businesses, have rebounded above pre-pandemic levels. At the other extreme are the worst-hit sectors such as construction, some consumer-facing (such as offline retail) and travel-related industries, which are still performing at about 30 per cent below pre-pandemic levels. In between are "significantly affected" sectors such as real estate, professional services as well as administration and support services, where output still lags pre-Covid-19 levels by about 10 per cent.