SINGAPORE …. MONTHLY COMMERCIAL REPORT – MAY 2012 ...

the recreational & personal services industry was in particular noteworthy as its earnings grew
significantly from the 3.9 per cent increase it had recorded in the previous quarter year-on-year.
Business services, excluding real estate, rental & leasing, generated an 8.9 per cent increase in receipts
in the first quarter of 2012, while receipts for transport & storage rose by 8.4 per cent; financial and
insurance by 5.1 per cent; real estate, rental & leasing by 4.7 per cent; information & communications by
4.1 per cent; and education services by 3.3 per cent. Although revenue for the education sector grew the
slowest among all other services sectors during this period, it was a marked improvement from its
showing in the previous quarter when its earnings had contracted by 3.4 per cent year on year.
Despite this, overall growth in business receipts in the services sector in the first quarter of 2012 from the
previous quarter was only marginal at one per cent. On a quarterly basis, services industries which
recorded higher business receipts from the last three months of 2011 included education services at 20.9
per cent, recreation & personal services at 6.2 per cent, health & social services at 5.9 per cent, financial
& insurance at 5.1 per cent and information & communications at a modest 1.4 per cent. Sectors that
declined in receipts compared to the previous quarter were business services, excluding real estate,
rental & leasing, by 6 per cent, transport & storage services by 2.4 per cent and real estate, rental &
leasing services by 2 per cent.
Trade Ministry keeps to forecast of 1-3% growth
The risks of slower growth have intensified with another flare-up of the eurozone debt crisis, the Ministry
of Trade and Industry (MTI) said , as it stuck to its forecast that Singapore will grow one to 3 per cent this
year. Despite a good first quarter, the authorities "remain cautious" about Singapore's growth outlook as
talk of a possible Greek exit from the eurozone fans fears of a disorderly sovereign debt default. Signs of
fragility in the US recovery and lacklustre export growth in Asia add to that external uncertainty too, MTI
permanent secretary Ow Foong Pheng said. The Singapore economy grew 1.6 per cent in Q1 from a
year ago, below the consensus market forecast of 1.8 per cent but in line with April's advance estimates.
Manufacturing anchored the pick-up in growth momentum. The economy grew 10 per cent quarter-onquarter
in seasonally adjusted, annualised terms, reversing Q4's 2.5 per cent contraction. The 19.8 per
cent q-o-q rise in industrial production beat advance estimates and reversed an 11.1 per cent drop in Q4,
with notable jumps in electronics and precision engineering output. Construction too, outdid advance
estimates to grow 32.1 per cent sequentially. But services grew 4 per cent in sequential terms, less than
advance estimates suggested. Wholesale and retail trade shrank, while sluggishness in fund
management activities led to a sequential contraction in the finance and insurance sector for a second
straight quarter. Economists, whose forecasts mostly surpass or fill the top-end of the official forecast
range, believe that positive growth momentum will hold up - for several reasons. The official composite
leading index, which correlates with GDP performance of the next quarter, rose a stronger 2.9 per cent in
seasonally adjusted quarter-on-quarter terms in Q1, up from 1.2 per cent in Q4. IE Singapore also
reported a better-than-expected rise in April's non-oil domestic exports. While pencilling in gradual
improvements in growth, some economists are now more cautious too. Developments in Spain, which slid
back into recession yesterday, are also being watched closely, Mrs Ow added. Maybank economist
Saktiandi Supaat's 3 per cent growth forecast does not account for a Greek default and, in fact, assumes
faster exports growth in the second half on the back of some recovery in the eurozone core. But recovery
there and elsewhere looks shaky, MTI said. As the drama over Greece unfolds, ongoing fiscal austerity
and bank deleveraging will keep eurozone demand sluggish. US employment growth appears to be losing
momentum and, this being an election year, an uncertain fiscal outlook may hit business confidence and
investment, Mrs Ow said. These external headwinds mean Asia's exports are likely to suffer too, despite
rising domestic demand, she added.
Inflation to stay around 5%, taper off in H2
Inflation is tipped to stay around 5.0 per cent in the next few months before reducing in the second half of
the year to bring the rate to 3.5-4.5 per cent for 2012, Trade and Industry Minister Lim Hng Kiang
said.The Consumer Price Index (CPI) hit a 5.2 per cent high in March and 4.9 per cent for the first three
months of the year. Mr Lim said the increase in prices in the coming months will in any case not hit