, Singapore

MTI keeps 3% to 5% GDP growth forecast for 2022

This is despite the faster-than-expected expansion of the economy in 2021 by 7.6%.

The Ministry of Trade and Industry’s (MTI) gross domestic product growth forecast for 2022 of 3% to 5% was unchanged, despite the faster-than-expected expansion of the economy by 7.6% last year.

Across sectors, growth will still be uneven in 2022, MTI said.

For outward-oriented sectors like manufacturing and wholesale trade – which expanded by 13.2% year-on-year (YoY) and 3.9% YoY in 2021, respectively—MTI said growth will remain strong given the continued global economic recovery.

Information and Communications and Finance and Insurance sectors will also remain healthy in 2022, following a 12.2% and 7.4% YoY growth in 2021.

On the flip side, aviation- and tourism-related sectors such as air transport and accommodation’s recovery will slow down this year on the back of recurring COVID-19 outbreaks and potential virus mutations

In particular, accommodation, which only grew by 1.7% last year, will be weighed down by “a projected fall in domestic demand as government demand for hotel rooms to serve as quarantine facilities decreases, and staycation demand drops with the relaxation of travel restrictions,” according to the MTI.

With the progressive easing of domestic restrictions and improvement of consumer sentiments, MTI said consumer-facing sectors will see a gradual recovery in 2022. In 2021, retail trade expanded by 10.2% YoY, whilst food and beverage services grew by 3%.

Activities will also continue in the construction, and marine and offshore engineering sectors “on the back of the progressive easing of border restrictions on the entry of migrant workers from South Asia,” the MTI said.

Whilst the construction sector saw 20.1% YoY expansion last year, MTI said output will remain below pre-pandemic levels throughout 2022.

Meanwhile, other economic indicators such as non-oil domestic exports (NODX) is expected to grow by 4% to 8% YoY in 2022, as per OCBC Treasury research's forecasts.

In 2021, the NODX expanded by 12.1%, breaking the official forecast of 9.5% to 10%.

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