Gross domestic product rose at a seasonally adjusted, annualised rate of 2.1 percent from prior three months, trade ministry said Wednesday.

Bloomberg survey median was 2 per cent, while government’s previous projection was 2.8 per cent. GDP expanded 3.6 per cent in the fourth quarter from the same period in 2016; median estimate was for 2.9 per cent.

While manufacturing in the trade-reliant economy was boosted last year by a surge in electronics exports, output has weakened recently as demand moderated.

Even with that easing, the economy posted full-year growth of 3.6 per cent in 2017, and is set to expand slightly above the middle of the 1.5-3.5 per cent forecast range this year, the trade ministry said.

“The manufacturing sector is likely to continue to expand and provide support to growth in the overall economy,” the ministry said in a statement. “In particular, the electronics and precision engineering clusters are projected to sustain a healthy, though more moderate, pace of growth in 2018.”

The generally robust outlook gives policy makers room to announce expected tax increases in the February 19 budget to help pay for increased spending on health and retirement benefits as the population ages rapidly.

The outlook also gives the Monetary Authority of Singapore scope to tighten policy this year after opening the door to a possible move in their last decision in October. The central bank’s next policy announcement is scheduled for April.

Jacqueline Loh, deputy managing director of the MAS, told reporters yesterday that the central bank hasn’t changed core or headline inflation forecasts since October and that the “monetary policy stance remains as announced then.”

The finance and transportation industries are set to benefit from firm external demand this year, and growth will probably broaden out to domestic-focused sectors, such as retail and food services as employment picks up, the ministry said. Construction and the marine and offshore engineering cluster will remain weak in 2018, it said.