The economy of Singapore grew by 1.5% year-on-year in the fourth quarter of 2014 compared to 2.8% in the previous quarter, according to the Ministry of Trade and Industry (MTI), citing advance estimates.
On a quarter-on-quarter seasonally adjusted annualized basis, the economy expanded by 1.6%, slower than the 3.1% expansion in the previous quarter.
For the whole of 2014, the economy is estimated to have grown by 2.8%, in line with MTI’s earlier announced growth forecast of around 3%.
Prime Minister Lee Hsien Loong in his New Year message graded the city-state’s economic performance of 2.8% last year as “moderately well,” even as he cautioned that growth will “be slower than we are used to.”
“One reason for this is that we have been tightening policies, including on foreign workers, to get our economy onto a path of sustainable, productivity-driven growth,” he said.
Lee said Singaporeans could take heart from the fact that “real median incomes continued to rise, leading to a 10% increase over the last five years” and that “unlike many developed countries, we are not facing unemployment and stagnant wages.”
But he said that productivity performance has been disappointing. “For the third year in a row, productivity growth has been weak. For the first three quarters, it is negative—0.5%. We must do better. Otherwise, our incomes cannot continue to rise, and will soon stagnate. We must redouble our efforts to help companies and workers upgrade, and become more productive.”
MTI said that on a sectoral basis, the manufacturing sector contracted by 2% in the fourth quarter of 2014 year-on-year, a reversal from the 1.7% expansion in the previous quarter. On a quarter-on-quarter basis, the sector contracted 5.8%, reversing the 3% growth registered in the preceding quarter. The contraction was mainly due to a decline in the output of the transport engineering, electronics, and general manufacturing clusters, the ministry explained.
The construction sector grew by 0.8% on a year-on-year basis, moderating from the 1.3% growth in the previous quarter. On a quarter-on-quarter basis, the sector expanded 8%, an improvement from the 0.1% expansion in the previous quarter. Growth was supported mainly by public sector construction activities.
The services industries grew by 2.6% in the fourth quarter, easing from the 3.4% growth in the preceding quarter. On a quarter-on-quarter basis, the services-producing industries grew 3.8%, similar to the 3.6% expansion in the previous quarter. Growth was supported primarily by the finance & insurance and business services sectors.
Photo: Bjorn Christian Torrissen
