SINGAPORE (Aug 11): The Ministry of Trade and Industry (MTI) announced today that it has narrowed Singapore's GDP growth forecast for 2017 to “2-3%”, from “1-3%”.

On a y-o-y basis, Singapore’s economy grew by 2.9% in 2Q17, while it expanded by 2.2% on a q-o-q basis.

The manufacturing sector continued to grow at 8.1% y-o-y in the second quarter.

Growth during the quarter was primarily supported by the electronics and precision engineering clusters, which expanded on the back of strong global demand for semiconductors and semiconductor-related equipment.

On the other hand, the biomedical manufacturing, general manufacturing and transport engineering clusters saw a decline in output.

The construction sector declined by 5.7% y-o-y, due to a fall of construction output in both private and public sectors.

The wholesale & retail trade sector grew by 1.5% y-o-y, supported by both the wholesale trade and retail trade segments, with the former in turn bolstered by the wholesaling of machinery, equipment & supplies.

Growth in the transportation & storage sector came in at 3.5% y-o-y, supported mainly by the water transport segment, which expanded due to an increase in container throughput and sea cargo handled at Singapore’s ports.

The accommodation & food services sector dropped 2.2% compared to the previous year as it was weighed down mainly by the segment’s weak performance, which contracted on the back of sluggish sales volume at restaurants.

The information & communications sector eased to 1.8% y-o-y, largely due to a sharper pullback in the telecommunications segment.

However, the IT & information services segment grew robustly following strong corporate demand for IT solutions.

The finance & insurance sector expanded 3.8% compared to last year as it was supported by the head offices & business representative offices and other administrative & support services segments.

“Other services industries” also expanded by 3.1% y-o-y as it was largely supported by the education, health & social services and the arts, entertainment & recreation segments.

In a separate media release by International Enterprise (IE) Singapore, Singapore’s total merchandise trade increased by 9.5% in 2Q17, extending the 16.4% expansion in the previous quarter, as both oil and non-oil trade grew.

The oil trade increased by 27.7% in 2Q17 amid higher oil prices compared to last year, moderating from the 77.1% expansion in the preceding quarter.

Non-oil exports (NOX) – including NODX and NORX – expanded 5.7% y-o-y, while Non-oil Domestic Exports increased 2.7%.

Singapore’s total services trade rose by 4.9% y-o-y, reaching $110.4 billion in 2Q17.

Meanwhile, services export rose 4.9% y-o-y, due to the increase in exports of transport, travel and other business services.

MTI says that the outlook for the global economy has remained stable in recent months, with the global growth expected to be higher in 2017 than 2016.

Singapore’s manufacturing sector is likely to continue to provide support to the local economy in the second half of the year.

The global trade is expected to help benefit the transportation & storage, wholesale trade and finance & insurance sectors.

Information & communications and education, health & social services sectors are likely to remain resilient, while the performance of the construction sector is expected to remain lacklustre given the continued weakness in private and public sector construction activities.