Economists raise 2010 growth outlook for Singapore to 6.5%

Economists have upped their growth outlook for Singapore as the city-state's key industries continue to rebound from last year's recession, according to a central bank poll.


The Monetary Authority of Singapore's survey of 20 private-sector economists showed they expected average growth of 6.5 per cent this year, higher than the previous forecast of 5.5 per cent in December.

The economists also raised their outlook for the island-state's major industries including manufacturing, which is now predicted to expand an annual 9.7 per cent this year - higher than the previous forecast of 6.3 per cent.

Wholesale and retail trade is seen growing 8.4 per cent instead of 7.0 per cent while construction is tipped to expand 8.9 per cent, from a previous projection of 7.1 per cent.

The government in February upgraded its 2010 economic growth outlook to 4.5-6.5 per cent from 3.0-5.0 per cent.

Singapore's economy contracted 2.0 per cent last year due to the global economic downturn. But it has managed to pull out of recession and rebounded strongly.

Improving global trade and continued consumption by major Asian markets like China spurred a rapid recovery in the beginning of this year.

Song Seng Wun, regional economist at CIMB-GK Research, said: "We see a very strong start to the year for the manufacturing sector, led by the pharmaceuticals sector, as well as a firmer contribution from the tech sector itself. So, collectively it looks like we're off to a very strong start for the year, and for the first quarter. Indeed the first-half performance may lift the overall figures for the full year itself."

Private-sector economists surveyed by the central bank said they expected GDP growth of 9.5 per cent for the first quarter.

Sector-wise, they said the long-term prospects for the financial services sector remain strong although it is expected to lag behind the others in the first quarter.

David Cohen, director of Asian economic forecasting at Action Economics, said: "Those numbers can fluctuate quarter on quarter, and as far as the financial services, the outlook is still bright in the long term. The fact that the stock market has bounced back nicely from a year ago should help support investment activity."

As for 2011, GDP growth estimates for Singapore came in at 5.5 percent. Experts said the lower expectation is the result of the inventory restocking cycle being over, and concerns over the pace of recovery in the more developed OECD economies.

- CNA/yb/ir

Singapore now among 10 most expensive Asian cities

By Yasmine Yahya, 938 LIVE
Original Post: 02 December 2009 1412 hrs

SINGAPORE: Singapore is now one of the top 10 most expensive Asian cities for expatriates to live in due to the strengthening of the Singdollar.

A survey by human resource consultancy ECA International showed that Singapore now has the ninth highest cost of living in the region.

Last year, the city-state was in the twelfth place.

ECA International said the cost of living for visitors to Singapore is also catching up with that of its neighbours.

A year ago, living costs in Singapore were about 15 per cent lower than in Hong Kong. Now, the difference is just seven per cent.

ECA International's Regional Director for Asia, Lee Quane, said the increase in living cost is unlikely to deter firms from relocating their staff here.

Tokyo maintained its position as the most expensive location for expatriates to live in, as the stronger yen outweighed the impact of deflation in Japan.

- 938LIVE/yb
Source: Channel New Asia News

Singapore declares its recession over

Singapore on Thursday declared a severe recession over as data showed its economy grew for the second straight quarter in the three months to September.

Official data released Thursday showed gross domestic product (GDP) expanded 14.2 percent in the July-September period on a quarter-on-quarter annualised basis following a 21.7 percent surge in the previous quarter.

“Effectively, the recession in Singapore is over,” Ravi Menon, permanent secretary with the Ministry of Trade and Industry (MTI), said at a media briefing.

“Economies around the world are now turning the corner… Singapore has benefited from these global and regional trends.”

Year-on-year, Singapore’s GDP grew 0.6 percent in the third quarter compared with a 3.3 percent contraction in the April-June period, the MTI said in its third-quarter economic survey.

The 0.6 percent annual growth in the July-September period was the economy’s first positive showing since the third quarter of 2008, when the city-state slid into a recession.

Growth in the third quarter was powered by the key manufacturing sector, which posted expansion of 26.6 percent on a quarterly basis following a 58.5 percent surge in the previous quarter, the ministry said.

Other sectors also turned in a positive display including the wholesale and retail industries, which grew 10.8 percent after a 7.9 percent increase in the second quarter, it said.

Wholesale and retail make up two-thirds of the economy.

In its outlook for 2010, the ministry forecasted economic growth of 3.0-5.0 percent while maintaining its existing projection of a contraction of 2.0-2.5 percent this year.

“Global economic developments suggest that the recession has ended in most countries,” the ministry said in a statement accompanying the quarterly survey.

“Singapore’s economic outlook for 2010 will be closely linked to global conditions.”
The city-state’s trade-reliant economy was the first in Asia to sink into a recession last year as the global downturn hit demand for its exports, especially from the United States.

Its worst recession since gaining independence in 1965 took place in 2001 when GDP shrank 2.4 percent.

The US economy’s recovery from its recession will be key to Singapore’s growth prospects, the ministry said.

“The key economy to watch is the US. We see the recovery there continuing into 2010 but at a sluggish pace,” said Menon.

“We do not expect a collapse in US private demand, however… but private demand will nonetheless be sluggish,” he said.

The US economy, a major market for Asia’s export-led economies including Singapore, has emerged from a prolonged recession that started in late 2007 as its GDP grew 3.5 percent in the July-September period.

It was the world’s largest economy’s first economic expansion since the second quarter of 2008 but analysts have cautioned the recovery remained fragile. – AFP

source: AFP, November 19, 2009

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