Singapore economy to post 7.6% growth in 4th quarter: economists

The Singapore economy is expected to register growth of around 7.6 percent on-year for the fourth quarter, capping off growth for the entire 2007 at 8 percent, according to economists.

They said financial services will be the main engine of growth for the economy, buffering the slack from the manufacturing sector.

The government is expected to release the fourth quarter flash estimates on January 2.

The projected 8 percent full-year growth puts Singapore near the top of world rankings, and economists said this reflects the growth in most key sectors.

David Cohen, Director of Action Economics, said: “Aside from China and India, there are few places that could boast 8 percent annual GDP growth. It’ll be looking pretty decent, highlighting the broad-based strength that the Singapore economy has enjoyed.

“Manufacturing for the full year – 6 percent year-on-year – it’s a respectable number in turn, reflecting the broad-based gains… with strength in oil rig production helping balance whatever sluggishness we saw in electronics and the month-to-month volatility in pharmaceutical production.”

Financial services are expected to lead the pack with its robust performance this year.

“For this full year, financial services will contribute the most. Growth has been fairly sharp in the first 3 quarters and even if we are seeing a slightly slower growth in the fourth, we still expect that to be the strongest performer,” said Alvin Liew, Global Research Economist at Standard Chartered.

The fourth quarter is expected to moderate from the previous three months. Manufacturing may still be sluggish, but that is offset by growth elsewhere.

Cohen said: “Outside of manufacturing, the services sector has been healthy, with strength in both financial services as well as tourist arrivals boosting retail sector.

“Finally, the construction sector is also humming along. After a number of ‘soft’ years, it has definitely picked up in the past year or two and will continue nicely… It seems to have considerable momentum going forward into 2008,” said Cohen.

Economists said they do not expect any nasty surprises this coming Wednesday, as numbers have been coming out fairly stable this year.

“Given that we have already experienced three strong quarters, we don’t think it will fall anywhere below the forecast range of 7.5 to 8 percent. Our internal forecast of 8 percent is more or less in line with market expectations,” said Liew.

For the year as a whole, the economy is forecast to grow by 7.5 to 8 percent. – CNA /ls

Source : Channel NewsAsia – 27 Dec 2007

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