Singapore economy increased by 2.3 per cent in Q1

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singapore-economySingapore economy grew by 2.3% in the first quarter, roundly beating the initial estimate, the trade ministry said on Tuesday, with a strong manufacturing sector expected to underpin further growth this year.

The ministry had predicted quarter-on-quarter expansion of a mere 0.1% based on two months of data. But growth was lifted by strong performance in the manufacturing sector, which expanded by 11.9% in three months and by 9.8% on a year basis.

On a year basis, the ministry said the city-state’s trade-reliant economy expanded by 4.9% in the first quarter. Growth in other sectors including finance and construction also helped boost the figure. The ministry maintained the official 2014 economic growth forecast at 2-4%, a pace it described as “modest”.

“In tandem with the gradual improvement in the global economy, externally-oriented sectors such as manufacturing and wholesale trade are likely to provide support to growth,” it said.

But it also said that “tightness in the labor market” would weigh on growth in some labor-intensive sectors, as some employers struggle to fill jobs.

The government has tightened rules on the hiring of foreign professional workers following protests and online complaints about the large number of foreigners in the affluent city-state of 5.4 million people.

Source: The economic Times