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Singapore’s Service Sector Driving Economic Growth

ByMingze Wu
Published 05/23/2013, 12:44 AM
Updated 07/09/2023, 06:31 AM

Singapore’s economy unexpectedly expanded last quarter as services and construction strengthened, reducing pressure on the central bank to ease monetary policy to boost growth.

Gross domestic product rose an annualized 1.8 percent in the three months through March from the previous quarter, when it grew 3.3 percent, the Trade Ministry said in a statement today. That compares with an April estimate of a 1.4 percent drop and the median in a Bloomberg News survey for a 1.2 percent contraction.

Asian economic growth is estimated by the International Monetary Fund to be faster than advanced nations this year, and increasing investor appetite for risk have spurred capital inflows into the region. Singapore last month stuck to a policy of allowing gradual currency gains to contain inflationary pressures.

“We could see a more pronounced improvement in the second half of the year,” Irvin Seah, a Singapore-based economist at DBS Group Holdings Ltd., said before the report. Services and construction remain healthy, and a better global growth outlook would boost exports, he said.

The Singapore dollar has gained about 0.8 percent in the past year. It fell 0.4 percent to S$1.2672 against the U.S. dollar as of 8:06 a.m. local time, paring losses from before the release.

The Monetary Authority of Singapore stuck to a policy of allowing gradual gains in its currency last month as inflationary pressures curbed scope for monetary stimulus. Consumer-price growth probably slowed in April to 3 percent from 3.5 percent in March, according to a Bloomberg survey before data due today.

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