2021 GDP growth forecast raised to 7.3%

This is on the back of a 15.5% YoY expansion of industrial production Q4 2021.

Experts predict that Singapore’s full-year gross domestic product (GDP) for 2021 will reach 7.3%, following the 15.5% year-on-year (YoY) expansion of industrial production (IP) in the fourth quarter (Q4) of 2021.

The new growth estimate is slightly higher than the Ministry of Trade and Industry's earlier forecast of 7.2%.

For the whole of 2021, the manufacturing sector expanded by 13.2%, driven by double-digit growth in electronics (14.5% YoY) and precision engineering (18.9% YoY), data from Maybank showed.

Looking at the December 2021 figures only, IP rose by 15.6% YoY, buoyed by biomedical manufacturing which grew 87.7% YoY. Other sectors such as transport engineering, aerospace segment, and general manufacturing also recorded impressive growth, expanding 40.8% YoY, 58.9% YoY, and 7.7% YoY, respectively.

Electronics, on the other hand, declined in December 2021 by 2.9%.

Given the better performance of the manufacturing sector, analysts are expecting the Q4 2021 GDP growth forecast to be revised up to 6.2% YoY from 5.9% YoY, UOB said.

Maybank’s estimate for Q4, meanwhile, was 6.5% YoY.

Nomura, for its part, said: “The strong IP reading in December was well above the 10.8% YoY implied by the official advance Q4 GDP estimate for manufacturing.”

“This hints at an upward revision of Q4 GDP growth by 0.3 percentage points from 5.9% YoY, by our estimate,” Nomura added.

For 2022, Nomura’s full-year growth forecast was at 4.7%; meanwhile, Maybank and UOB had lower forecasts at 3.8% and 4.0%, respectively.