Singapore’s economy had a smaller contraction in the first quarter than previously estimated, suggesting that the trade-reliant nation’s growth target this year remains achievable.

Gross domestic product declined an annualized 0.4% in the January-March period from the previous three months, according to final estimates from the Ministry of Trade and Industry released Thursday. That was better than a previous estimate of a 0.7% drop and compares with a forecast for a 0.6% contraction in a Bloomberg survey of economists.

Downside risks in the global economy have risen, which could weigh more heavily on consumption and business investments, the MTI said in a statement. It retained its full-year growth forecast at 0.5%-2.5%, with growth likely to come in at around the mid-point of the range.

The revision comes amid a deteriorating global demand outlook, with the US economy exposed to potential strain from a standoff in debt ceiling talks. Also, weaker-than-expected economic data from China have prompted analysts to downgrade growth forecasts for the world’s second-largest economy.

Trade-reliant Singapore is vulnerable to a slump in global demand. The city-state expects non-oil domestic exports to decline between 8%-10% in 2023.

That downgrade to trade forecast takes into account the worse-than-expected exports performance, with outbound shipments recording a contraction every month so far this year.

Year-on-year, the economy grew 0.4% in the first quarter, compared with an earlier estimate of a 0.1% expansion.

--With assistance from Kevin Varley and Tomoko Sato.