Singapore economy expects 5% growth in current year

SINGAPORE: Singapore's economy is expected to grow by around 5 per cent in the current year and by 1 to 3 per cent next year.

The city state's economy grew by 6.1 per cent on a year-on-year basis in the third quarter of 2011, up from 1.0 per cent in the preceding quarter, Singapore Ministry of Trade and Industry (MTI), said in a release today.

The manufacturing sector of the export-oriented island state expanded by 14.2 per cent on a year-on-year basis, reversing from the 5.6 per cent decline in the preceding quarter.

The MTI attributed the manufacturing sector recovery to a rebound in biomedical manufacturing output, as some companies switched to producing a higher value mix of pharmaceutical products.

By contrast, the electronics cluster continued to contract, as global demand for semiconductor chips and other electronic components moderated, it said.

The construction sector grew marginally by 0.3 per cent on a year-on-year basis, moderating from the 1.5 per cent growth in the preceding quarter.

The wholesale and retail trade sector saw a small year-on-year decline of 0.2 per cent, mainly due to weakening export activities.

Supported by air travel demand, the transport and storage sector grew by 4.2 per cent, similar to the pace of growth in the preceding quarter.

The financial services sector grew at 10.5 per cent on a year-on-year basis, anchored by gains in domestic and offshore lending activities, it said.

However, the business services sector registered a weak growth of 1.7 per cent, largely due to a moderation in the real estate services segment.

The MTI said growth in the fourth quarter would weaken alongside deteriorating external macroeconomic conditions.