Singapore economy grows 14.3% in Q2: MTI advance estimates

SINGAPORE — The Singapore economy grew by 14.3 per cent in the second quarter of 2021, compared to a year ago, advance estimates from the Ministry of Trade and Industry (MTI) showed.

The strong year-on-year growth was largely due to a low base in the second quarter last year, when the gross domestic product (GDP) fell by 13.3 per cent due to the circuit breaker restricting non-essential activities in April and May that year, MTI said in a statement on Wednesday (July 14).

However, on a quarter-on-quarter seasonally adjusted basis, the Singapore economy contracted by 2 per cent in the second quarter and this was partially attributed to heightened alert restrictions imposed in mid-May this year to curb a resurgence of Covid-19 cases. 

The GDP in the second quarter this year still remains 0.9 per cent below pre-pandemic levels in the second quarter of 2019. 

Year-on-year, the economy saw an upswing across both goods-producing and services-producing industries. 

Construction, in particular, saw a 98.8 per cent jump compared to a year ago, after a 23.1 per cent decline in the previous quarter. 

This sharp upturn was due to low base effects as the circuit breaker measures had resulted in a stoppage of most construction activities in the second quarter of last year, MTI. said 

Manufacturing also grew by 18.5 per cent on a year-on-year basis in the second quarter this year, extending the 11.3 per cent growth of the previous quarter. 

The wholesale and retail trade as well as transportation and storage sectors grew by 9.3 per cent year-on-year for the second quarter, while the information and communications, finance and insurance and professional services sector grew by 7.8 per cent. 

The accommodation and food services, real estate, administrative and support services and other services sectors grew by 13.4 per cent. Most sectors within this group grew on the back of a low base in the second quarter of last year due to the circuit breaker, MTI said. The GDP for these sectors still remained 11.8 per cent below its level in the second quarter of 2019 before the pandemic.

On a quarter-on-quarter seasonally adjusted basis, the Singapore economy contracted by 2 per cent in the second quarter. This is a reversal from the 3.1 per cent growth in the preceding quarter.

Among the reasons given for this quarter-on-quarter shrinkage was the tightening of restrictions during the heightened alert phase that started in mid-May. These restrictions affected the services sector in particular. Accommodation and food services, real estate, administrative and support services and other services sectors fell by 3 per cent. 

Construction also fell by 11 per cent, a reversal from a 4.5 per cent growth in the previous quarter.