Services sector likely to grow a measly 1.8%

It's around 70% of overall economy.

According to DBS, the crux of the issue lies in the performance of the services sector. This sector accounts for about 70% of the overall economy. Historically, the performance of the economy is closely tied to it. If the services sector turns, the economy turns along with it.

This sector is expected to grow 1.8% QoQ saar in the first quarter. This is a tad slower than what it was in the previous quarter (2.5%).

Here's more from DBS:

Although tepid, the return in investor confidence as well as stronger intra-regional trade will provide the necessary impetus for growth in this sector in the coming quarters.

Global economic conditions are gradually improving. While pockets of risk remain in Eurozone, the US economy is recovering while growth momentum across Asia is likely to pick up pace in the coming quarters.

This essentially implies growth trajectory of a slower first half, followed up a pick-up in the second half of the year for the Singapore economy. Hence, this weak first quarter growth should not come as a surprise. Global outlook is expected to be brighter if one looks further into the horizon.