Singapore's economy should grow at the top end of official forecasts this year or even beat them after gross domestic product (GDP) powered to 9.1% annual growth in the first quarter, analysts said April 10. Strong performances from the manufacturing and services industries drove GDP growth and minimized the impact from a contraction in the construction sector, the Ministry of Trade and Industry said.
The expansion, based on preliminary estimates using data from January and February, was faster than the 8.7% annualized growth recorded in the fourth quarter of 2005. The government has projected GDP to grow 4% -5% this year after posting a better-than-expected 6.4 % rise in 2005.
The manufacturing sector, which accounts for almost a third of Singapore's GDP, surged 16% in the March quarter, faster than the 14.2% year-on-year expansion in the final quarter of 2005. This was "underpinned largely by strong growth in the electronics, biomedical and transport engineering clusters," the ministry said.
Leslie Tang, an economist with UOB Kay Hian brokerage, said the export-led economy should maintain its growth momentum heading into the second quarter. However, moderation is expected in the second half as the economy feels the impact of high oil prices and slower demand from key exports markets especially the United States. "It will start to feel the impact of high interest rates globally and domestically and high oil prices. Plus we are expecting some sort of a slowdown in the U.S. in the second half," said Tang, who maintained his 2006 GDP projection at 5.9%.
Copyright Agence France-Presse, 2006
