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Economy

Singapore GDP rebounds 14.3% in April-June quarter

Manufacturing offsets impact of four weeks of renewed COVID restrictions

Singapore's economy is on the mend after last year's worst performance since independence.   © Getty Images

SINGAPORE -- The Singaporean economy rebounded 14.3% on the year in the April-June quarter, according to preliminary figures released Wednesday, continuing a steady recovery from the darkest days of the COVID-19 pandemic.

The latest figure is the highest jump since the second quarter of 2010, when the city-state posted an 18.6% surge in gross domestic product after the global financial crisis. Still, due to last year's deep slump, the economy is still below where it was two years ago.

GDP did decline 2.0% from the first quarter on a seasonally adjusted basis, as an uptick in local coronavirus infections prompted tighter restrictions for four weeks from May to June of this year. This included a ban on dining at restaurants.

The manufacturing sector, though, expanded 18.5% from a year earlier. "The electronics and precision engineering clusters continued to see healthy expansions due to robust global demand for semiconductor and semiconductor equipment respectively," the Ministry of Trade and Industry said in a statement.

Meanwhile, the services and construction sectors grew 9.8% and 98.8%, respectively. While these sectors remained constrained by travel and social gathering restrictions as well as a shortage of migrant workers, they showed signs of recovery from the worst period last year. The services sector's growth turned positive for the first time in six quarters.

During the same quarter of 2020, Singapore marked a 13.3% year-on-year GDP fall due to the monthslong "circuit breaker" lockdown, under which most workplaces were closed. This led to an annual contraction of 5.4%, the worst performance for the city-state since its 1965 independence.

The growth rate turned positive in the first quarter of 2021, at 1.3%, thanks to export demand for Singapore's core semiconductor and pharmaceutical products.

Preliminary GDP figures are mainly based on the results of the first two months of a quarter. Official statistics showed benchmark non-oil domestic exports expanded 6.0% on the year in April and 8.8% in May. Manufacturing output rose 2.3% in April and 30.0% in May.

With vaccinations progressing, Singapore on Monday eased some restrictions. It also plans to allow bigger events for groups of vaccinated people from around late July, when more than 50% of the population will have received two doses.

"Further ahead, vaccines should enable Singapore to gradually reopen its border, which would provide a boost to the tourism sector," Capital Economics' economist Alex Holmes pointed out in a note. "The external sector should continue to perform well on the back of buoyant demand for semiconductor and pharmaceuticals."

The government earlier projected the economy would grow 4% to 6% for the full 2021. Elsewhere in the region, Vietnam has already reported its GDP figures for the second quarter, which came to 6.6% growth.

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