Advanced estimate of 1Q 2014 GDP growth were +5.1% YoY and +0.1% seasonally-adjusted annualized QoQ (saQoQ).

Base effect plays a key role in the YoY and saQoQ figures given the flattish +0.6% YoY expansion in 1Q 2013 and robust +6.1% saQoQ rise in 4Q 2013.

Maintain our 2014 growth forecast of +3.7% (2013: +4.1%). Official real GDP growth forecast remains at +2.0% to +4.0%.

Advanced estimate of 1Q 2014 GDP growth was influenced by base effects. Singapore economy expanded by +5.1% YoY and +0.1% saQoQ. This compared with the flattish +0.6% YoY in 1Q 2013 and the robust +6.1% saQoQ growth in 4Q 2013.

By sectors, growth was led by manufacturing and construction as both sectors grew YoY and saQoQ whereas services GDP expanded YoY but shrank saQoQ. Manufacturing growth was largely due to a sharp rebound in biomedical industry and stronger growth in chemicals output, while construction sector benefited from stronger expansion in public sector construction activities. Services were affected by softer wholesale & retail trade and finance & insurance sub-sectors

No change in our full-year growth forecast. We maintain our +3.7% real GDP growth forecast for 2014 (2013: +4.1%). Growth were robust in the quarters following 1Q 2013 i.e. Apr-Dec 2013 +5.3%, presenting a higher base against the rest of 2014. Moreover, notwithstanding the firmer external demand, manufacturing growth in 1Q 2014 was driven by the volatile biomedical sector; construction gains in public sector works will be negated by downturn in the property markets; and expansion in external trade-related services will be offset domestic-driven services due to policy measures that are cooling the property market and household borrowings.

Source: Maybank Kim Eng Research - 15 Apr 2014