Singapore enjoyed better than expected economic growth in the second quarter, according to government data published yesterday, a move that saw an upgrade to the official 2010 growth forecast.
Singapore’s Ministry of Trade and Industry said yesterday that it expects the country’s economy to grow by 13% to 15% over 2010, up from the earlier forecast of 7% to 9%.
The Government said the updated growth forecast reflects three factors:
- Better economic performance in the first quarter of 2010;
- Stronger than expected economic growth in the second quarter; and
- Anticipated slowdown in growth momentum for the rest of the year.
The Ministry said that for the six months to June, the economy is estimated to have expanded by 18.1% year-on-year.
But it warned there will be a more subdued outlook for the six months to December.
"Although the global economy remains on a recovery path, the pace of growth has slowed," the Ministry said in yesterday’s statement.
"In the US, there are now signs of a slowdown in the labour market following the recovery earlier in the year.
"This has affected consumer confidence.
"In the EU, domestic demand remains depressed as concerns over the sovereign debt crisis persist.
"The implementation of fiscal austerity measures in some of the economies may further weaken their domestic demand.
"The weakening of the Euro against key trading partners will also dampen import demand in the EU.
"The sluggish final demand in the US and EU has moderated industrial activities and lowered expectations for manufacturing output in the Asian economies.
"The momentum of the global economic recovery has thus moderated, although a double-dip recession remains unlikely at this juncture.
"The exceptionally strong growth experienced by the Singapore economy in the first half of 2010 is therefore not likely to be sustained into the second half of the year.
"There will also be industry-specific factors, such as plant maintenance shutdowns in the biomedical manufacturing cluster that will drag down growth.
"While year-on-year growth rates in the second half will be healthy, sequential growth from current levels of economic activity will be low."
The department said that the upward revision in first quarter performance shows that the Singapore economy grew at a stronger pace in the first quarter of 2010.
"The economy expanded by 16.9 per cent on a year-on-year basis, higher than the growth of 15.5 per cent estimated in May.
"On a seasonally-adjusted quarter-on-quarter annualised basis, the economy grew by 45.9 per cent, compared to an earlier estimate of 38.6 per cent.
"The revision is primarily due to an upward adjustment to the growth estimate for the manufacturing sector (specifically the biomedical manufacturing cluster).
"Advance estimates for the second quarter of 2010 indicate that the economy has continued to expand strongly.
"Compared to the same period last year, real GDP is expected to grow by 19.3 per cent.
"On a sequential basis, the economy grew by 26.0 per cent in the second quarter.
"The manufacturing sector is estimated to have grown by 45.5 per cent year-on-year.
"Growth was driven by a surge in the output of the biomedical manufacturing cluster, as well as a strong expansion in the electronics cluster underpinned by healthy worldwide demand for electronics products.
"The construction sector is estimated to have grown by 13.5 per cent on a year-on-year basis, compared to 10.2 per cent growth in the first quarter of 2010.
"This was supported by an increase in public sector construction activities."
China releases June monthly and June quarter economic growth figures that are expected to show continued strong growth.
