Saturday February 23, 2013
Singapore Q4 GDP beats forecasts
SINGAPORE: Singapore's economic outlook brightened after fourth-quarter growth was revised up substantially, with its young biomedicals sector contributing more to the economy than the electronics sector for the first time.
Singapore's gross domestic product (GDP) expanded at an annualised rate of 3.3% in the fourth quarter from the preceding three months, turning around from the 4.6% contraction in the third quarter, according to revised seasonally adjusted data released by the Trade and Industry Ministry yesterday.
The government declared it was cautiously positive on the outlook for the city-state, which has been grappling with slowing growth amid a sharp downturn in demand for its exports.
Its electronics sector, which has long been the mainstay of its manufacturing industry, has struggled in recent quarters due to depressed overseas demand.
The fourth-quarter growth beat the 2.1% median forecast of economists polled by Reuters and was higher than the advance estimate of 1.8%.
Banks such as ANZ and DBS Group expect Singapore's 2013 growth to come in at the top end or exceed the government's 13% growth forecast, underpinned by improving global economic conditions.
DBS economist Irvin Seah said the better-than-expected fourth quarter “marks the turnaround in the growth trajectory from the bottom registered in third quarter 2012”.
Leif Lybecker Eskesen, chief economist at HSBC for India & Asean, was more guarded about the outlook due to the uncertain external environment.
“The high-beta economy remains very much at the whim of the global economy, which is still not in tip-top shape, notwithstanding the signs of stabilisation we have seen in recent months,” he said.
The Singapore dollar rose slightly on the stronger-than-expected data, and was recently at 1.2377 to its US counterpart by 0645 GMT, compared with 1.2420 before the report.
DBS's Seah said that although the electronics sector would probably remain sluggish in the coming months, pharmaceutical and transport engineering segments would lead an improvement in manufacturing. He expects the Singapore economy will grow 3.2% this year.
“The return in investor confidence as well as stronger intra-regional trade will provide the necessary impetus for growth in (services) in the coming quarters,” he added.
Manufacturing grew 1.9%, after shrinking 13.6% in the third quarter, while services expanded 2.5% following the growth of 0.4% in the preceding period.
For the whole of 2012, Singapore's economy expanded 1.3%, down from a revised 5.2% in 2011. - Reuters