The Ministry of Trade and Industry (MTI) today revised Singapore’s GDP growth forecast for 2020 downwards to -7.0 to -4.0 per cent. However, there are pockets of resilience in the Singapore economy. Within the manufacturing sector, the biomedical manufacturing cluster is expected to continue to expand, supported by the production of pharmaceutical and biological products.
The Singapore economy contracted by 0.7 per cent on a year-on-year basis in the first quarter, a reversal from the 1.0 per cent growth in the previous quarter. On a quarter-on-quarter seasonally-adjusted annualized basis, the economy shrank by 4.7 per cent, a pullback from the 0.6 per cent expansion in the fourth quarter of last year.
The manufacturing sector expanded by 6.6 per cent year-on-year, reversing the 2.3 per cent contraction in the previous quarter. Growth was on account of output expansions in the biomedical manufacturing, precision engineering and transport engineering clusters, which outweighed output declines in the electronics, general manufacturing and chemicals clusters.
In particular, the pharmaceuticals segment of the biomedical manufacturing cluster recorded a surge in the production of active pharmaceutical ingredients and biological products during the quarter.
On a quarter- on-quarter seasonally-adjusted annualized basis, the manufacturing sector grew by 37.3 per cent, rebounding from the 5.9 per cent decline in the preceding quarter.
The transportation and storage sector contracted by 8.1 per cent year-on-year, a reversal from the 0.8 per cent expansion in the previous quarter. Within the sector, the air transport segment shrank on the back of a steep decline in air passengers handled at Changi Airport due to the global travel restrictions imposed to contain the spread of COVID-19.
Similarly, both the water transport and land transport segments contracted amidst sluggish growth in total sea cargo handled and reduced domestic demand for public transport respectively.
On a quarter-on-quarter seasonally-adjusted annualized basis, the transportation and storage sector shrank by 29.9 per cent, a sharp reversal from the 2.0 per cent growth in the fourth quarter.
All other sectors experienced contraction. Besides manufacturing, other sectors that experienced growth included the information and communications sector, which grew by 3.5 per cent year-on-year, and finance and insurance sector, which expanded by 8.0 per cent year-on-year.