Singapore grows 1.6 per cent in January-March quarter

SINGAPORE: Singapore's economy grew by 1.6 per cent on a year-on-year basis in the first quarter of 2012, compared to 3. 6 per cent in the preceding quarter, official announcement said today.

But the city-state cautiously maintained its GDP growth forecast at between 1 per cent and 3 per cent for this year, citing fragile global economic outlook.

On a quarter-on-quarter, seasonally-adjusted annualised basis, the economy expanded by 10 per cent, reversing the 2.5 per cent contraction in the previous quarter, said the Ministry of Trade and Industry (MTI) today.

It said Singapore's growth momentum has picked up, supported by a strong upturn in the manufacturing sector as the global economy started the year on a firmer footing.

But the recovery in the global economy remains fragile and vulnerable to downside risks, especially the sluggish US market and the Eurozone sovereign debt troubles.

In Asia, notwithstanding the support from rising domestic demand, growth would be curtailed by lacklustre export performances amidst the external headwinds, said MTI.

Additionally, there was increased uncertainty surrounding the Eurozone's political climate and fiscal outlook.

"A disorderly sovereign debt default in the Eurozone cannot be ruled out at this stage. If it materialises, there will be considerable downsides for the global economy and Singapore's externally oriented industries," said the Ministry.