Singaporean Economy Continues to Struggle


After a meager growth in the last quarter of 2012, Singapore recovery may be still out of reach. In the first quarter of 2013, the economy contracted 0.6 percent year-on-year and 1.4 percent quarter-on-quarter, as exports and industrial production data were disappointing.

Indeed, manufacturing output has been on a downward trend since June of 2012. In fact, in the first three months of 2013, it contracted by 6.5 yoy, following the 1.1 per cent decline in the previous quarter. To make things even worst, retail sales declined in March for the sixth month in a row, and dropped by 7.4 percent yoy, hurt by a 32.7 percent drop in sales of motor vehicles, as a result of restrictions put on the car sales. On the positive side, exports slightly improved in April, and grew by 1.6 percent yoy, mainly boosted by re-exports and non-electronic shipments. Moreover, the inflation rate, which has been on an upward pressure due to growing housing and car prices and tighter foreign manpower controls, slowed to 3.5 percent in March. In fact, the introduction of financing restrictions on motor vehicle loans and additional taxes hurt demand, thus lowering transport costs. More importantly, in the first three months of 2013, unemployment rate remained low at 1.9 percent, though it slightly increased over the previous quarter, as job creation slowed.  


In the first quarter of 2013, the GDP contracted 0.6 percent year-on-year and 1.4 percent quarter-on-quarter. The rise in services and construction sectors wasn't enough to offset the high drop in manufacturing production, which contracted by 6.5 percent year-on-year.
 
In the first quarter of 2013, unemployment rate increased to 1.9 percent, from 1.8 percent recorded in the previous quarter. Yet, tighten foreign manpower controls carried out by the government in 2012, slowed the growth of the number of foreign workers and raised local employment.
     

In March, manufacturing production declined 4.1 percent yoy, after dropping 16.3 percent in the previous month. Throughout 2012 business confidence has been very weak. Yet, in the first three months of 2013, it reached the highest level in 12 months.  
 
Exports have been weak since June of 2012. In April, total exports slightly improved and grew by 1.6 percent yoy, after declining by 7.6 percent in March and 19.5 percent in February. 

 


Joana Taborda | joana.taborda@tradingeconomics.com
5/17/2013 10:28:09 AM