Singapore’s economy grew slightly slower than expected in the first quarter, preliminary data showed on Thursday.
Gross domestic product (GDP) rose 3.4% in January-March on a year-on-year basis, according to advance estimates from the Ministry of Trade and Industry. Economists polled by Reuters had expected growth of 3.8%.
On a quarter-on-quarter seasonally adjusted basis, GDP grew 0.4% in January-March.
“While we expect a rebound in the services sector in the second quarter, especially for in-person activities, slowing global growth, supply chain disruptions and weaker growth prospects for China will weigh on growth momentum,” Priyanka Kishore, India and Southeast Asia chief economist at Oxford Economics, said.
Singapore made its biggest reopening moves from the Covid-19 pandemic in late March and early April, easing local restrictions and allowing vaccinated travellers from anywhere in the world to enter without having to quarantine.
The data were issued as Singapore’s central bank tightened its monetary policy, saying the widely forecast move will slow the inflation momentum as the city state ramps up its battle against intensifying price pressures made worse by the Ukraine war.
The policy tightening, the third in the past six months, came as separate government figures showed Singapore’s economic momentum waning over the first quarter.
The local dollar jumped briefly after the Monetary Authority of Singapore (MAS) re-centred the mid-point of the exchange rate policy band known as the Nominal Effective Exchange Rate, at its prevailing level.
All 16 economists polled by Reuters expected the MAS to tighten but they were divided on which parameters it would change.
Of them, five predicted the MAS would increase the slope and re-centre the mid-point. “We forecast further tightening this year by increasing the slope by another 0.5 percentage points,” Kishore said.
The Singapore dollar strengthened about 0.5% after the statement and hit a one-week high of S$1.3552 per US dollar.
The central bank maintained its forecast for gross domestic product to expand 3% to 5% this year.
- Reuters, with additional editing by George Russell