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."
The first paragraph shouted loudly the excitement, and as one read
further into the paragraphs that follow, the reality begin to sink
in to those more alert at carefully reading the news with a heavy
pinch of salt, while those too lazy to filter the too good news
with caution will flip with joy.
Note that as one read deeper into the text, the author has made
several careful retracing of the enthusiasm first screamed out.
Note the following:
1. 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 hoopla for the second quarter was based only on
estimates using data from April and May, when the full quarter that
should have included June was not included.
2. 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.
Note the confusing comparison of the Manufacturing data that
compared to its Year to Year performance a year ago, as well as to
its performance in the first quarter.
Still a note of caution was again made to dampen the
loud enthusiasm that caused the loud hoopla.
3. "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.
The third advisory of caution that the manufacturing of the star
performer in biomedical manufacturing output and electronics may
not be sustainable.
4. 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.
While Singapore's sales to the region have picked up, these
cannot possibly replace the larger markets of US, Europe and Japan
that have a combined market that is far bigger then what the region
has been able to help sustain Singapore stellar growth over the
years.
This alone would have given a reality shake-up that would have
made the hoopla a total irresponsible announcement that delude less
informed Singaporeans.
We will need to ask - if this is the best that can be
produced by the sum total of all the super talents in the PAP
leadership that are paid individually paid their million dollar
annual wages ?
For all the boast made about the Super Talents in the ranks of
the Super PAP elites, they remain as impotent as ordinary
Singaporeans, who are advised to wait for the USA to pull
themselves out and become the engine of growth for the world.
Obama has given his administration a time frame of 2 years for
the US economy to get back on track.
Can the super talent in the PAP perform miracles, when the
USA cannot turn around the USA in less time, and when
Singapore's main trading partner are the USA, Europe and Japan
- all three being mutually dependent on each other's economic
viability and stuck in the present financial meltdown ?
