- POSTED: 05 Aug 2014 20:35
Minister for Trade and Industry Lim Hng Kiang said leading indicators in the US and Europe signal modest recovery in the global economy for the rest of the year.
SINGAPORE: Minister for Trade and Industry Lim Hng Kiang told Parliament on Tuesday (Aug 5) that despite the recent slowdown in manufacturing and exports, he is maintaining an overall GDP growth outlook of 2 to 4 per cent for the year, in light of anticipated modest recovery in the global economy for the rest of the year.
Growth in the manufacturing sector decelerated to 0.2 per cent year-on-year in the second quarter, from 9.9 percent in the previous three months. Domestic exports, too, grew at a slower pace of 3.2 percent on-year in the second quarter, compared to 3.3 per cent in the previous quarter.
Mr Lim says, this is due to sluggish economic conditions in the US and China. But looking ahead, he adds that leading indicators in the US and Europe signal modest recovery in the global economy for the rest of the year.
Amid the global recovery, externally-oriented sectors, such as manufacturing and wholesale trade, are likely to support growth. In particular, manufacturers are expected to benefit with new orders and new export orders sub-indices of the Purchasing Managers Index rising to 51.8 and 52.0 respectively in the second quarter of this year. However, some domestically oriented sectors could be weighed down by labour constraints.
"Our domestically oriented sectors, such as business services are expected to remain resilient. But we can expect some of our labour intensive taxes such as retail, to see the growth weighed down by labour constraints," said Mr Lim. "So taking everything (into account), as usual, barring downside risk in global macro economic environment, we expect the Singapore economy to grow by 2 and 4 percent this year."