Singapore’s Q2 economy expands by 18.8% year-on-year

Final data out Tuesday showed that the economy expanded by 18.8 per cent on-year, lower than the 19.3 per cent increase initially estimated.

Compared to the previous quarter, gross domestic product or GDP in the April to June period stood at 24 per cent.

That’s also just a tad below the 26 per cent on-quarter growth initially forecast.

For the first half of this year, the Ministry of Trade and Industry says the Singapore economy grew by 17.9 per cent.

This figure was revealed by Prime Minister Lee Hsien Loong in his National Day message on Sunday.

Looking at the various sectors, MTI says manufacturing output expanded by 44.5 per cent on a year-on-year basis.

Manufacturing output expanded by 44.5 per cent on a year-on-year basis. Growth was led by the biomedical manufacturing and electronics clusters, which increased production of higher value active pharmaceutical ingredients and semiconductor chips.

The construction sector grew by 11.5 per cent, supported by an increase in public sector construction activities.

The services-producing industries continued to expand by 11.2 per cent year-on-year in the second quarter of 2010.

The wholesale & retail trade sector expanded by 18.9 per cent on the back of strong global trade flows, while the financial services sector grew by 10.2 per cent due to increased foreign exchange trading activities and domestic bank lending.

The hotels and restaurants sector as well as other services industries also saw double-digit growth rates of 10.4 per cent and 12.9 per cent respectively, bolstered by higher visitor arrivals and activities in the new Integrated Resorts.

Real GDP grew by 17.9 per cent in the first half of 2010, as compared to 2.8 per cent in the preceding second half of 2009.

But MTI warns that growth for the second half of 2010 could be slower.

That’s because the global economy is expected to remain on a modest recovery path, albeit one that will continue to ease for the rest of the year.

MTI says the weakness in the US labour and housing markets, combined with a decline in consumer confidence will affect household spending.

Within the European Union, MTI points out that circumstances involving the southern European economies remain frail.

As such, recovery in final demand in the EU is therefore expected to remain sluggish.

Anticipated plant maintenance shutdowns in the biomedical manufacturing cluster will also drag down overall growth.

Taking into account all the factors, MTI has kept the full year economic growth forecast for 2010 at 13 to 15 per cent, saying the global economy is expected to remain on a modest recovery path.

MTI said for the Singapore economy, the strong growth momentum in the first half of 2010 is not likely to continue into the second half of the year, although growth rates will remain healthy.

Source : Channel NewsAsia – 10 Aug 2010

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