Singapore slightly upgrades Q4 GDP, keeps 2022 forecast for growth at 3-5%

Singapore's economy expanded slightly more than initially estimated in the fourth quarter from a year ago, official data showed on Thursday, and the government kept its forecast for growth to come in at 3%-5% this year.

Gross domestic product (GDP) grew 6.1% year-on-year in the fourth quarter, the Ministry of Trade and Industry (MTI) said, slightly higher than the 5.9% growth in the government's advance estimate.

Analysts had expected a 6.2% increase, according to a Reuters poll.

For the full year, GDP grew 7.6% versus an initial 7.2% estimate and a 4.1% contraction in 2020.

On a quarter-on-quarter seasonally-adjusted basis, the economy expanded 2.3% in the fourth quarter.

Singapore's economic recovery has been led by the trade-related and manufacturing sectors, but activity in industries exposed to tourism, aviation and consumers are expected to remain below pre-COVID levels even by the end of 2022.

"Global supply bottlenecks remain and are expected to persist throughout the first half of 2022, thereby constraining industrial production and GDP growth in the near term," said Gabriel Lim, permanent secretary for trade and industry.

"Persistent supply bottlenecks, alongside rising energy prices due to geopolitical tensions, have also exacerbated global inflationary pressures," he said.

The Monetary Authority of Singapore tightened its policy settings in January in its first out-of-cycle move in seven years. It is widely expected to tighten again at its scheduled policy meeting in April.

"For monetary policy purposes, we assess that the balance of risk is still tipped towards inflation," said Edward Robinson, Deputy Managing Director at the MAS. The central bank will release its next review on its monetary policy in April as scheduled, he said.

(Reporting by Aradhana Aravindan in Singapore; Editing by Sam Holmes)