Singapore economy projected to increase by up to 7%

This is an upgrade from the previous 4% to 6% predicted by the Ministry of Trade and Industry.

The Ministry of Trade (MTI) and Industry announced a growth forecast of 6% to 7%, an upgrade from the initial prediction of 4% to 6%.  

Compared to last year’s statistics, the economy flourished by 14.7% compared to the previous quarter.

Selena Ling, head of Treasury Research and Strategy, agreed with the upgrade to Singapore’s economic forecast. 

“It did not come as a surprise that MTI upgraded the full-year growth forecast from 4% to 6% year-on-year (YpY) to 6% to 7% YoY, citing a gradual recovery in the second half of the year, supported in large part by outwards-oriented sectors and the progressing easing of domestic and border restrictions as vaccination rates continue to rise. The latter would support the recovery of consumer-facing sectors and alleviate labour shortages in foreign worker-reliant sectors. The construction sector, for instance, remains hampered by the foreign worker constraint in the near-term since the closure of borders to higher-risk countries.”

This uptick can be attributed to the lifting of circuit breaker measures, which allowed for several sectors to recover from the effects of the pandemic. 

Notable sectors include the construction sector growing by 106.2%, retail trade by 50.7%, and food and beverage by 36.7% on a YoY basis. This resulted in a 7.7% increase on a YoY basis for the economy of Singapore during the first half of 2021. 

UOB Economist Barnabas Gan expects the growth rate to be at 6.5% for 2021. This is due to the current vaccination efforts, as well as export and manufacturing performance has seen year-to-date.