Singapore's economic growth this year is likely to be better than last year's 2 per cent, even as the city-state's Ministry of Trade and Industry (MTI) keeps its earlier forecast range of 1 to 3 per cent for 2017.
This comes as the economy saw a slower, but "resilient" pace of growth in the first quarter of 2017 when compared to what was seen late last year, fuller estimates of gross domestic product (GDP) growth released by MTI on Thursday morning showed.
Singapore's trade-reliant economy is often affected by global trends, which may result in unexpected growth trajectories. Last year, after the MTI narrowed Singapore's 2016 full-year growth in November to a range of 1 to 1.5 per cent, a surge in global demand for electronics good led its economy to grow by 2 per cent for the full year.
On Thursday, MTI said that the external outlook is improving, but some uncertainties remain.
"Taking these factors into account, the GDP growth forecast for 2017 is maintained at '1 to 3 per cent'," said MTI.
"Barring the materialisation of downside risks, GDP growth is likely to come in higher than the 2 per cent in 2016," it concluded.
Estimates showed that Singapore's economy, led by strong manufacturing growth, grew a widely-expected 2.7 per cent year-on-year in Q1 2017, compared to 2.9 per cent on Q4 2016.
On a sequential basis, the economy in Q1 2017 shrank 1.3 per cent from Q4 2016, when it rebounded strongly by 12.3 per cent from the preceding quarter.
But external outlook, underpinned by stronger growth in advanced economies like the US and in the Eurozone, is improving, noted MTI.
However, MTI expressed caution about uncertainties ahead.
It noted that protectionism may still impact global trade adversely, as the United Kingdom starts talks with the European Union on its withdrawal, and there remains policy uncertainty from the United States.
In Asia, a monetary tightening in China, which is a major trading partner for Singapore, can impact its growth.
"Although the performance of the Singapore economy was resilient in the first quarter, and the global growth outlook has improved slightly, downside risks in the global economy remain," it said.
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