Singapore says economy jumps 20 percent in second
quarter, raises 2009 growth forecast
By Alex Kennedy, Associated Press Writer
On Monday July 13, 2009, 11:45 pm EDT
SINGAPORE (AP) -- Singapore's economy grew for the first time in
a year, soaring 20 percent in the second quarter, a sign Asia is
emerging from the global slump.
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Gross domestic product jumped an annualized, seasonally adjusted
20.4 percent in the three months through June from the previous
quarter, the Trade and Industry Ministry said Tuesday in a
statement. It said GDP fell 3.7 percent from year earlier after a
9.6 percent drop in the first quarter.
The ministry now expects the Southeast Asian city-state's
economy to shrink between 4 percent and 6 percent this year, better
than its previous forecast of a contraction between 6 percent and 9
percent.
"The Singapore economy is back and back with a vengeance," said
Robert Prior-Wandesforde, senior Asia economist for HSBC in
Singapore. "We very much doubt that today's Singapore GDP release
will be the last in Asia to provide a sizable upside surprise."
The island's economy -- which relies on exports, finance and
tourism -- had contracted the previous four quarters as it reeled
from a collapse in global trade triggered by the financial crisis.
An annualized 16.4 percent drop in the October-December period was
the nadir of its deepest recession since splitting from Malaysia in
1965.
Singapore is the first major Asia economy to report second
quarter GDP results. The second quarter GDP estimate was calculated
using data largely from April and May and is subject to
revision.
The ministry revised its first quarter economic figures to an
annualized contraction of 12.7 percent from its initial estimate in
April of a 19.7 percent contraction.
A surge in pharmaceutical production helped boost growth in the
second quarter. Manufacturing fell 1.5 percent from a year ago
compared to a 24 percent contraction in the first quarter.
Construction rose 18 percent in the second quarter while services
dropped 5.1 percent.
The ministry warned that the rebound in manufacturing could wane
over the rest of the year.
"A sizable part of Singapore's manufacturing uptick came from a
spike in biomedical manufacturing output and electronics inventory
restocking, both of which may not be sustained," the ministry
said.
Demand for exports from the U.S., Europe and Japan remains weak,
but Singapore's sales to Indonesia, Malaysia and China have picked
up, said Irvin Seah, an economist with DBS bank in Singapore.
"The main driver for this recovery has been our exports to the
region," Seah said. "We're seeing strong demand from Asia,
especially China."
"Asia is showing signs that it is able to drive its own demand,
which is a good sign for the region's growth."
