Singapore’s economy grew more than expected in the first quarter and the government maintained its growth forecast for the year, but issued a cautious note on the recovery amid uncertainties over the COVID-19 pandemic.

Gross domestic product (GDP) grew 1.3% year-over-year in the first quarter, the Ministry of Trade and Industry (MTI) said on Tuesday, higher than growth of 0.2 % observed in the government’s advance estimate.

Manufacturing, finance and insurance, and wholesale trade supported the expansion in the quarter. Analysts had expected an increase of 0.9%, according to a Reuters poll.

MTI has kept its GDP growth forecast for 2021 between 4% and 6% for now, but warned of a greater degree of uncertainty than usual caused by the pandemic as well as new national brakes against the virus. The outlook will be reviewed in August.

Authorities last month said growth could exceed the upper end of the forecast range, recovering from the pandemic-induced recession in 2020, its worst on record.

While there is a possibility that Singapore’s economy will outperform growth forecasts for 2021 if external demand exceeds expectations, there are also significant downside risks, said Gabriel Lim, permanent secretary for trade and industry.

“The pace of recovery in different sectors of the economy is likely to be more uneven than expected,” he said.

On a seasonally adjusted quarterly basis, the economy grew 3.1% in the first quarter.

Separate data showed April’s factory output rose 2.1% year-over-year for the sixth consecutive month of growth, but it was the slowest gain since October and the forecast analysts have missed.

The city-state is often seen as an indicator of global growth as international trade overshadows its national economy.

The government injected more than S $ 100 billion ($ 75.34 billion) into the economy to deal with the fallout. The central bank maintained its accommodative monetary policy at its last meeting in April.

“The accommodative and supportive stimulus for fiscal and monetary policy continues to flow through the system,” said Edward Robinson, deputy managing director of the Monetary Authority of Singapore.

He said the political position remained appropriate and that MAS would review it in October, as scheduled.

The central bank will look at factors that may affect “the dynamics of inflation, as well as growth considerations,” he said.

Singapore this month reimposed some restrictions on social gatherings, the most difficult since coming out of a lockout last year, to tackle a recent surge in local COVID-19 infections. Read more

“A lot of the exuberance that we had in the first quarter, it’s kind of a bit backward,” said Selena Ling, head of treasury research and strategy at OCBC Bank.

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