Updated: 05/20/2014 22:50

Singapore economy grew 4.9% in Q1 2014

Singapore economy grew 4.9% in Q1 2014

The Singapore economy grew by 4.9 per cent in the first three months of this year, compared to the same period a year ago. 

It is however lower than the 5.1 per cent flash estimates released last month. 

The data was released by the Trade and Industry Ministry this morning. 

The Ministry of Trade and Industry or MTI says the lower estimates are partly due to the re-basing effect, which saw it change its base year for national accounts from 2005 to 2010. 

Overall, growth was led by the manufacturing sector, which jumped 9.8 per cent on a year-on-year basis.

And that's largely driven by the biomedical manufacturing, chemicals and transport engineering clusters. 

Although every sector grew in this quarter, the pace of growth was slower in sectors like construction and financial services. 

Construction grew 6.7 per cent due to weak private sector activities. 

Finance and insurance rose 5.4 per cent, slower than the 10.5 per cent growth in the previous quarter. 

Wholesale and retail trade grew 5.4 per cent while transportation and storage expanded 4.9 per cent. 

And business services rose only 3.4 per cent due to a slow-down in the real estate cluster. 

Looking ahead, MTI's Permanent Secretary Ow Foong Pheng sounded a word of caution. 

"For 2014, the global economy is expected to continue to improve modestly, supported by a sustained recovery in the US and Eurozone economies. However, there are always downside risks.In the US, there are uncertainties over the pace at which the Federal Reserve will exit from its accommodative monetary policy. An unexpected tightening of monetary conditions would weigh significantly on financial markets and business sentiments in the US. It could also lead to more volatile capital flows, which could in turn adversely affect emerging market economies." 

Senior Economist at Mizuho Bank Vishnu Varathan is also cautious. 

"The bigger worry is China. China's growth has slowed down. So depending on what policies China adopts, that could also have quite a bearing on Asian economies. We will probably see growth remaining at about 4 per cent but nothing is going to move in a straight line. We could see a bit of a bumpy and tentative recovery rather than an unbridled recovery from here." 

MTI has maintained its growth forecast for this year at two to four per cent. 

-By Gwendolyn Goh

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