SINGAPORE: International travel was one bright spot, and perhaps even a saving grace for the economy, based on a May 25 (Thursday) report from the Ministry of Trade and Industry of final estimates for the first quarter of this year.
It showed that Singapore’s economy grew by 0.4 percent year-on-year in the first quarter, following the 2.1 percent expansion from the previous quarter.
The manufacturing sector showed a decrease of 5.6 percent year-on-year, worse than the 2.6 percent contraction it saw in the last quarter of 2022, while the construction sector grew by 7.2 percent, with an increase in both the public and private sector construction.
And while overall, the transportation and storage sector has slowed, air transport and land transport have expanded, with the former especially due to the recovery of international travel.
The accommodation sector has done even better, expanding by 21.9 percent year-on-year and improving upon the 7.8 percent growth it saw in the previous quarter.
This growth is also due to a strong recovery in international visitor arrivals.
Notably, the food and beverage sector has also expanded 12.2 percent yearly due to bigger volumes at food caterers and restaurants.
MTI added in its report that the growth outlook for the aviation- and tourism-related sectors of the Singapore economy remains positive, given the ongoing recovery in international air travel and inbound tourism.
These include the air transport, accommodation and arts, entertainment and recreation sectors, and the aerospace segment of the transport engineering cluster.
The ministry also wrote that it expects the economic growth to be between 0.5 to 2.5 percent for this year.
MTI’s chief economist, Ms Yong Yik Wei, told Bloomberg, “We do not expect technical recession this year. Given the downside risks and the weakening outlook, we cannot rule out the possibility that there could be some quarters of negative Q-o-Q growth this year. But again, that’s not our baseline.”
She added that if the economy were to “slip into a technical recession, it is really very much manufacturing- and trade-led.”/TISG
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