SINGAPORE: Singapore's economy grew by 2.7% year-on-year in the first quarter of 2024, based on preliminary data from the Ministry of Trade and Industry (MTI) released on Friday, April 12. This marked a stronger pace of growth compared to the 2.2% seen in the final quarter of 2023.

On a quarter-on-quarter, seasonally adjusted basis, the economy grew by 0.1%, following a 1.2% increase in the previous quarter. These advance GDP figures are derived from data collected in January and February, serving as an early indicator of economic growth for the quarter. MTI noted that these figures are subject to revision once more comprehensive data is available.

In related news, Singapore has maintained its GDP growth forecast for 2024 at 1-3%, following a 1.1% growth rate in 2023. Meanwhile, Taylor Swift's concerts are expected to boost Singapore's GDP, with economists revising their growth forecasts upward.

Sector Performance

• Manufacturing: The sector expanded by 0.8% year-on-year in the first quarter, a slowdown from the 1.4% growth recorded in the fourth quarter of 2023. This moderation resulted from a decrease in output in electronics, biomedical manufacturing, and general manufacturing, which offset gains in chemicals, precision engineering, and transport engineering. On a quarter-on-quarter basis, the sector contracted by 2.9%, reversing the 4.5% growth seen in the previous quarter.

• Construction: The sector grew by 4.3% year-on-year, following a 5.2% growth in the last quarter of 2023. MTI attributed this growth to an increase in public-sector construction output, despite a decline in private-sector output. Quarter-on-quarter, the sector shrank by 1.7%, following a 2.0% growth in the previous quarter.

• Wholesale and Retail Trade, Transportation and Storage: These sectors collectively expanded by 2.7% year-on-year, up from 1.0% in the previous quarter. The growth in wholesale trade was driven by the sale of machinery, equipment, supplies, metals, household equipment, timber, and construction materials. Meanwhile, transportation and storage benefited from increased activity in the water and air transport segments. On a quarter-on-quarter basis, these sectors expanded by 1.4%, a reversal from the 0.7% contraction in the last quarter.

• Information and Communications, Finance and Insurance, Professional Services: This group of sectors grew by 4.2% year-on-year, accelerating from the 3.6% growth in the previous quarter. The growth in the information and communications sector was driven by strong demand for IT and digital solutions. Professional services growth was led by the head offices and business representative offices segment, while the finance and insurance sector's growth was fueled by the banking and auxiliary financial services segments. However, on a quarter-on-quarter basis, the group contracted by 4.2%, reversing the 4.4% growth from the previous quarter.

• Accommodation, Food Services, Real Estate, Administrative and Support Services, and Other Sectors: This group expanded by 2.9% year-on-year in the first quarter of 2024, an improvement from the 2.0% growth in the fourth quarter of 2023. All sectors in this group, except for administrative and support services, saw growth, with accommodation benefiting from a significant increase in international visitors. On a quarter-on-quarter basis, these sectors grew by 2.2%, recovering from the 0.7% contraction in the previous quarter.

The final GDP data for the first quarter of 2024, including details on sector performance, sources of growth, inflation, employment, and productivity, will be released in May's Economic Survey of Singapore.

Impact of Concerts and Outlook for the Rest of 2024

Selena Ling, OCBC's chief economist, noted that recent concerts by artists like Coldplay and Taylor Swift likely provided a temporary boost to consumer-facing industries such as hospitality and entertainment. Looking ahead, she expects Singapore's economic growth to strengthen throughout 2024, with manufacturing, particularly in the electronics sector, leading the way. Additionally, the financial sector could support growth as global monetary policy trends toward easing in the second half of the year.

Barnabas Gan, RHB Bank's acting group chief economist, also predicts further acceleration in Singapore's GDP growth. RHB's forecast for the second quarter of 2024 stands at 3.2%.