Singapore's economy grew 2.7% year-on-year in the first quarter of 2024, the quickest pace in 18 months, data showed on Thursday as the government said it expected manufacturing and trade-related sectors to improve over the course of 2024.
The growth matched a preliminary estimate released last month and was stronger than the 2.5% forecast by economists in a Reuters poll. It was the fastest pace since the economy grew 4.1% on a year-on-year basis in the third quarter of 2022.
Edward Robinson, deputy managing director of the economic policy group at the Monetary Authority of Singapore (MAS), said after the data that current monetary policy settings were appropriate.
"The prevailing rate of appreciation of the exchange policy band is needed to keep a restraining effect on imported inflation as well as domestic cost pressures," he said at a media briefing.
"We had assessed it to be sufficient to ensure medium-term price stability in the economy."
The central bank left monetary policy settings unchanged at a policy review in April. The next policy review is due in July.
OCBC economist Selena Ling said MAS policy will likely remain unchanged for rest of the year. "They are still awaiting the easing in core inflation in the fourth quarter," she said.
While inflation has fallen from its peak of 5.5% in early 2023, it remains stubborn amid slowing economic growth and had reached a seven-month high in February.
On a quarter-on-quarter seasonally adjusted basis, GDP expanded 0.1% in the January to March period, in line with the preliminary estimate.
LEADERSHIP CHANGE
The trade ministry, which maintained its GDP growth forecast for 2024 at 1.0% to 3.0, said the manufacturing and trade-related sectors were expected to see a gradual pick-up over the course of the year.
OCBC's Ling said first quarter data showed the economy was on track for full-year GDP to come in "slightly above the 2% handle".
Non-oil exports for the trade-reliant economy have been falling, with an annual 9.3% contraction in April and a 20.8% contraction in March.
Enterprise Singapore said on Thursday its forecast for the year was for non-oil exports to be at +4.0% to +6.0%.
The trade ministry saw some risks, including geopolitical tensions disrupting supply chains and commodity markets, tight global financial conditions and emerging market volatility as policy cycles diverged from advanced economies.
The Asian financial hub has just had its first leadership change in two decades, with Lawrence Wong taking over as prime minister last week. In his inauguration speech, Wong said he was taking over at a challenging time globally. "As an open economy, our livelihoods will be hit when multilateralism fractures," he said.
