Monday, July 19, 2010

Tharman: GDP call based on short-term rebound

(SINGAPORE) While Singapore's latest growth forecast of 13-15 per cent had surpassed expectations, it reflects a short-term rebound, says Finance Minister Tharman Shanmugaratnam.

'To put it in perspective, we've had two years averaging nearly zero per cent growth,' Channel News Asia reported him as saying. 'This year, assuming it's 15 per cent - taking the upper end of the range - that's 5 per cent over three years, which is a good performance but not out of sync with what we think is the underlying rate of growth of the Singapore economy, which is 3-5 per cent going forward.'

Mr Tharman added that the focus now was to ensure that an annual growth rate of 3-5 per cent can be sustained through productivity growth.

The Ministry of Trade and Industry last week bumped up the official forecast of Singapore's 2010 GDP growth by an unprecedented six points to 13-15 per cent, after a sizzling 18 per cent pace in the first half.

The government's stunningly strong growth forecast on Wednesday caught many by surprise - and prompted an upward revision in the estimates of many private sector economists.The last time Singapore's full-year growth crossed 13 per cent was in 1972 when the economy grew 13.5 per cent - not far from the all-time high of 13.8 per cent in 1970. Still, MTI made it clear that the first half's 'exceptionally strong growth' is unlikely to be sustained into the second half, with a 'more subdued outlook' up ahead.

Source: Business Times, 19 Jul 2010

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