A buoyant first quarter lifted Singapore's economic prospects higher than forecast only two months ago.
The Singapore economy is now expected to grow by 7 to 9 per cent this year. The Ministry of Trade and Industry (MTI), which in February predicted 4.5 to 6.5 per cent growth this year, raised its forecast today following what it called "exceptionally strong growth in the first quarter of 2010" .
Advance estimates indicate 13.1 per cent growth in the first quarter compared to a year ago.
Manufacturing output more than doubled since the last quarter while the construction sector grew by 11.3 per cent and services by 8.4 per cent from a year ago.
The ministry now forecasts 2.5 to 3.5 per cent inflation this year, up from 2 to 3 per cent predicted earlier.
The ministry reported today:
Advance estimates indicate that Singapore’s GDP expanded strongly by 13.1 per cent on a year-on-year basis in the first quarter of 2010. On a seasonally adjusted quarter-on-quarter annualised basis, Singapore’s GDP grew by 32.1 per cent.
Growth was led by the manufacturing sector. On a quarter-on-quarter annualised basis, the sector expanded by 139 per cent in the first quarter of 2010, after shrinking 29 per cent in the fourth quarter of 2009. The sharp improvement in performance could be attributed to two key factors — first, the robust expansion of electronics production underpinned by a strong recovery in global semiconductor chip sales; and second, a stronger-than-expected surge in biomedical manufacturing output. The construction sector grew by 11.3 per cent on a year-on-year basis in the first quarter of 2010, supported by sustained public sector civil engineering activities and an increase in the number of residential construction projects.
The services producing industries also expanded, registering a year-on-year growth of 8.4 per cent. Expansion was driven largely by wholesale trade, which improved on the back of sharp increases in exports of electronic goods. Growth in transport and storage, hotels and restaurants as well as financial and business services also contributed to improved performance for the services sector.
The overall CPI inflation forecast for 2010 is revised from 2 to 3 per cent to 2.5 to 3.5 per cent in view of the strong economic recovery.