S’pore ups 2010 growth

SINGAPORE’S economy, which contracted 2 per cent last year, is expected to grow at 4.5 to 6.5 per cent this year, adding to evidence of a sustained regional recovery.

The Ministry of Trade and Industry gave the revised GDP growth forecast in a statement on Friday morning. The earlier prediction was for the economy to grow 3 to 5 per cent in 2010.

The economy expanded by 4 per cent in the fourth quarter of 2009, from a year ago, after growing by 0.6 per cent in the previous quarter. On a seasonally adjusted quarterly annualised basis, Singapore’s GDP contracted by 2.8 per cent in the fourth quarter, said MTI.

The services sector grew by 6.6 per cent in the fourth quarter, compared to 8.2 per cent growth in the third quarter. The trade- and tourism-related sectors posted the strongest gains compared to the previous quarter. The financial sector, however, contracted from the previous quarter, in part due to declines in the fund management and stockbroking segments.

The manufacturing sector contracted by 29 per cent in Q4, reversing from the 25.6 per cent expansion in the third quarter. This decline was mainly due to a contraction in the output of the biomedical manufacturing and transport engineering clusters. Growth in the electronics and chemicals clusters strengthened on the back of continued recovery in global trade.

On the outlook for 2010, MTI said Asia is expected to experience a strong recovery this year. But the recovery in the G3 economies, is expected to be weaker, largely supported by fiscal stimulus measures and inventory accumulation in the first half of the year.

‘The outlook for the second half of the year remains uncertain. Private final demand in the G3 may remain weak, as there are still few indications that non-policy induced private demand is gaining strength,’ it noted.

‘The Ministry of Trade and Industry expects the Singapore economy to grow by 4.5 to 6.5 per cent in 2010. This upgrade from the earlier 3 to 5 per cent forecast largely reflects increased strength in the near term growth momentum.’

Source: Straits Times, 19 Feb 2010