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Singapore's 2021 GDP grows at fastest pace in over a decade

January 03, 2022 / 09:25 AM IST
Apple’s most ambitious retail project sits on the waters of Marina Bay in Singapore and so is called as ‘Apple Marina Bay Sands’. (Image:

Apple’s most ambitious retail project sits on the waters of Marina Bay in Singapore and so is called as ‘Apple Marina Bay Sands’. (Image:

Singapore's economy expanded at its fastest annual pace in over a decade in 2021 as the country emerged from its worst recession on record, caused by the deep hit to activity from the coronavirus pandemic.

The city-state's economy grew 7.2 percent in 2021, preliminary data showed on Monday, broadly in line with the government's official projection and rebounding from the record 5.4 percent contraction in 2020.

Singapore's annual gross domestic product growth was the fastest since a 14.5 percent expansion in 2010 when the economy emerged from the global financial crisis.

The government has previously said it expects GDP to grow 3 percent to 5 percent in 2022. GDP rose 5.9 percent in October-December on a year-on-year basis, the Ministry of Trade and Industry said in a statement, faster than the 5.4 percent growth forecast in a Reuters poll on analysts.

GDP grew 2.6 percent on a quarter-on-quarter seasonally adjusted basis in October-December, higher than the 1.2 percent growth in the preceding quarter.

Separately, the Southeast Asian city-state on Monday posted a preliminary 5% rise in private home prices in the fourth quarter, the most since 2009.

The government implemented a package of measures to cool its property market last month, including raising stamp duties and tightening loan limits.

Prime Minister Lee Hsien Loong said last week in his New Year message Singapore's economy is recovering steadily and that the government sees a need to start raising the sales tax.

The government has flagged a plan to raise the goods and services tax by 2 percentage points to 9 percent between 2022 and 2025.

While analysts expect the economy to continue to grow, they cautioned that the Omicron coronavirus variant could become a drag if social distancing rules are tightened again.

The city-state has vaccinated 87 percent of its population. As of Saturday, 41 percent of the population has received their COVID-19 booster shot.

Sung Eun Jung at Oxford Economics expects growth to be led more by the service sector than the manufacturing in 2022 as domestic demand momentum improves.

"We expect monetary and fiscal policies will further tighten this year with planned GST hike adding to rising price pressures," she said.

Economists widely expect the central bank to tighten again in April this year as price pressures persist. Similar to major financial hubs around the world, Singapore has seen its inflation rate rise in the past few months with headline prices up 3.8 percent in November, the fastest in nine years.

The Monetary Authority of Singapore unexpectedly tightened its monetary policy at its last meeting in October amid mounting inflationary pressures caused by supply constraints and a recovery in the global economy.

first published: Jan 3, 2022 09:25 am