Opening Remarks by PS Mrs Ow Foong Pheng for 1Q13 Economic Survey of Singapore

 Opening Remarks 

1                   Good morning and welcome to MTI.

2                   Details on Singapore’s economic performance for the first quarter and the growth outlook for 2013 are contained in the press release.  Let me highlight a few key points.

3                   Singapore’s GDP growth eased in the first quarter of 2013.

• On a year-on-year basis, GDP grew by 0.2 per cent in the first quarter, compared to 1.5% in the previous quarter. 
• On a quarter-on-quarter basis, the economy grew by an annualised rate of 1.8 per cent, slowing from the 3.3 per cent growth in the previous quarter.
• The pull-back in quarter-on-quarter growth momentum was mainly due to the decline in externally-oriented sectors such as manufacturing and wholesale trade.
• Nevertheless, the finance & insurance, business services and construction sectors provided support to growth in the quarter.
• Notably, the finance & insurance sector surged by an annualised rate of 51% on a quarter-on-quarter basis, due to robust growth in the sentiment-sensitive segment and the financial intermediation cluster, amidst signs of stabilisation in the external environment.  

4                   Looking ahead, global economic growth is expected to improve gradually for the rest of the year.

• In the US, the economy is likely to grow modestly with   private demand helping to cushion the impact of fiscal cutbacks. 
• The Eurozone is expected to remain in recession amidst record high unemployment and weak domestic demand.
• In Asia, growth is likely to be moderate, supported by healthy domestic demand.
• Recent monetary policy easing by various central banks could also provide some support to the global economic recovery.
• However, risks to the global growth outlook remain. Fiscal uncertainties in the US remain with the failure of Congress to raise the debt ceiling. The Eurozone is prone to a potential flare-up of the sovereign debt crisis. Other uncertainties include the risk of an escalation in regional geopolitical tensions, and a possible global outbreak of respiratory viruses.

5                   Barring downside risks, the Singapore economy remains on track to grow by 1.0 to 3.0 per cent in 2013.

• Externally-oriented sectors are expected to pick up in tandem with a gradual recovery in external demand. Notably, Singapore’s manufacturing Purchasing Managers’ Index (PMI) expanded for the second consecutive month in April 2013, while the electronics PMI remained in the expansionary zone for the third consecutive month.
• Meanwhile, continued growth in the construction sector and key services sectors such as finance & insurance and business services will provide support to the economy.

6                   Together with my panel members, I will now take your questions.