Chart of the Day: These 2 factors have been propping Singapore's economy up since 1Q14

Supporting a rosy outlook for end-2014.

According to a research by Standard Chartered, Singapore’s economy sustained its positive momentum in Q1-2014. GDP grew 4.9% y/y, unchanged from Q4-2013. 

The economy expanded at a 2.3% q/q seasonally adjusted annualised rate (SAAR), slower than the previous quarter’s 6.9% expansion but still positive.

Here's more from Standard Chartered:

The final y/y growth print was lower than the government’s advance estimate of 5.1%, but this was due to the rebasing of GDP numbers to 2010 prices from 2005 prices. As a result of this change, 2013 GDP growth was revised down to 3.9% from 4.1%.

The Ministry of Trade and Industry (MTI) expects the external environment to remain positive, supporting externally oriented sectors such as manufacturing and wholesale trade; this is in line with our view. MTI cited a quicker-than-expected normalisation of US monetary policy and the rebalancing of China’s economy as potential risks to Singapore’s growth prospects this year.

It remains cautious on prospects for domestically oriented sectors due to the continuing tightness in the labour market. MTI maintains its growth forecast of 2-4% for 2014. We forecast growth at 4.4%.

The Q1 expansion was supported by both domestic and external factors. Export growth was 6.8% y/y, the third consecutive quarter above 6%.

According to International Enterprise Singapore, while non-oil domestic exports (NODX) contracted 1.0% y/y in Q1 (-2.1% in Q4-2013), re-exports growth remained robust (12.9% y/y versus 14.2% in Q4-2013). MTI expects export growth of 1-3% this year. In the domestic economy, private consumption increased 2.8% y/y (2.1% in Q4-2013), and the contraction in investment moderated to 1.1% from 4.6% in Q4-2013. Government expenditure fell 10.1% y/y, likely due to the strong base effect from last year.