Singapore's trade-sensitive economy slowed in the first quarter on sluggish demand for its exports, the government said Thursday, warning that risks remained despite improved global conditions.
The Ministry of Trade and Industry said gross domestic product (GDP) climbed 0.2 percent year-on-year in the three months to March, much slower than the preceding quarter's 1.5 percent year-on-year growth.
Compared with the previous quarter, the economy rose 1.8 percent, the ministry said, revising advance estimates released last month which showed GDP had shrunk 1.4 percent.
However, this was still slower than the 3.3 percent quarter-on-quarter jump in the previous three months.
"The pullback in the quarter-on-quarter growth momentum was mainly due to the decline in externally-oriented sectors such as manufacturing and wholesale trade," the ministry said.
Manufacturing, which accounts for about a quarter of the economy, slumped 6.8 percent year-on-year and 12.3 percent when compared with the previous quarter.
Growth should "improve gradually" for the rest of the year in tandem with an expected rise in global demand for exports, supported by domestic drivers such as the construction and services sectors, the ministry said.
It kept its growth forecast at 1.0-3.0 percent this year, barring downside risks.
"Fiscal uncertainties in the US remain with the failure of Congress to raise the debt ceiling, while the eurozone is prone to a potential flare-up of the sovereign debt crisis," the ministry said in a statement.
"Other uncertainties include the risk of an escalation in regional geopolitical tensions and a possible outbreak of respiratory viruses."
In a separate statement, the city-state's trade promotion body International Enterprise Singapore said total trade fell 9.0 percent year-on-year to Sg$230 billion ($181 billion) in the first quarter.
Key non-oil domestic exports tumbled 12.5 percent year-on-year, accelerating from the 4.2 percent decline in the preceding three months, on lower shipments of electronic and non-electronic items.
"Global macroeconomic conditions have stabilised and global economic growth is expected to improve gradually. Singapore's trade is expected to pick up in tandem with the projected gradual recovery in global demand," IE Singapore said.