MTI maintains 4%-6% GDP growth forecast in 2021

The Singapore economy contracted by 5.4% in 2020.

Singapore's official gross domestic product (GDP) growth forecast for 2021 maintains at 4%-6%, the Ministry of Trade and Industry (MTI) announced.

This is amidst the Singapore economy having contracted by 5.4% in 2020, a reversal from the 1.3% growth recorded in 2019.

MTI’s forecast has taken into account the progress in COVID-19 vaccine development and deployment, with several approved vaccines being rolled out in many economies around the world.

Singapore’s external demand outlook remains largely similar compared to three months ago.

The ministry also emphasised that uncertainties and risks in the global economies remain, including the developments in the pandemic, the risk of financial system stresses amidst a protracted economic recovery, excessive private sector indebtedness, and continued geopolitical uncertainty.

“Singapore’s COVID-19 situation remains under control and our vaccination programme is also underway. However, the pace of border reopening has slowed amidst the global surge in COVID-19 cases and the emergence of more contagious strains of the virus,” MTI said in the report.

The economy is expected to gradually recover throughout 2021 despite having an uneven outlook across sectors.

Outward-oriented sectors are projected to benefit from the pickup in external demand.

The manufacturing sector is likely to expand at a faster pace than previously projected due to robust semiconductor demand from the 5G and automotive markets. 

Meanwhile, the information anjd communications sector and the finance and insurance sector are expected to continue to post steady growth, supported by sustained enterprise demand for IT and digital solutions, and credit and payment processing services respectively.

However, a weaker recovery is also expected in the hard-hit tourism- and aviation-related sectors due to the slower-than-anticipated lifting of global travel restrictions, as well as sluggish travel demand.