Singapore's economy is poised to meet its upgraded 2006 growth targets of 6.5% to 7.5% after gross domestic product (GDP) surged beyond expectations in the first half, analysts said Aug. 10.
The Ministry of Trade and Industry (MTI) earlier raised growth targets from 5% to 7% after announcing GDP expanded an annual 8.1% in the second quarter. The targets were announced by Prime Minister Lee Hsien Loong in his National Day speech late Aug. 8 however MTI cautioned the economy still faced downside risks with high oil prices and a U.S. economic slowdown seen as major concerns.
Singapore's manufacturing sector, which accounted for one-third of GDP worth 194 billion Singapore dollars (US$124 billion) in 2005, grew 12.5% in the June quarter from a year earlier, driven by double-digit expansion in its transport engineering and biomedical clusters, the MTI said.
With the pivotal manufacturing sector providing the stimulus, economist Song Seng Wun of CIMB-GK Research sees a slower second half but expects the economy to power on to an 8% expansion in 2006. Song said electronic manufacturers would increase output towards the year-end holiday period while services would gain from the International Monetary Fund and World Bank annual meetings taking place in September.
Copyright Agence France-Presse, 2006