Singapore’s 4.9 percent gross domestic product (GDP) increase in the first quarter will put GDP on track to grow by 2 to 4 percent this year, Ministry of Trade and Industry (MTI) Permanent Secretary Ow Foong Pheng said.

At a press briefing on May 20, Ow pointed to some attributes, saying that the US economy is expected to post modest growth in 2014, the eurozone is expected to return to growth this year after contracting the year before and private consumption expenditure is expected to rise on the back of improvements in household wealth and consumer sentiments.

“Externally-oriented sectors such as manufacturing and wholesale trade are likely to provide support to growth, in line with the gradual pick-up in the global economy” and “domestically-oriented sectors such as business services are also expected to remain stable,” she added.

In the first quarter, manufacturing was the biggest growth contributor, expanding 9.8 percent thanks to a sharp rebound in the biomedical cluster, chemicals and transport engineering.

Meanwhile, the finance and insurance sector expanded by 5.4 percent on-year, slowing from the 10.5 percent growth in the previous quarter. The labour crunch will affect the key services sector, which accounts for about 68 percent of overall GDP and also drive up the inflation rate as businesses pass on higher wage costs to consumers.

International Enterprise Singapore said total trade would grow between 1 and 3 percent this year as the contraction in non-oil domestic exports has continued to slow since early last year, to a 1 percent on-year drop in the first quarter.-VNA