SINGAPORE, Feb 20 — Singapore’s economy expanded last quarter after a pick-up in manufacturing at the year end, with the government predicting an improvement in overseas demand in 2014 amid a global recovery.
Gross domestic product rose an annualised 6.1 per cent in the three months through December from the previous quarter, when it climbed a revised 0.3 per cent, the trade ministry said in a statement today. That compares with a January estimate of a 2.7 per cent contraction and the median in a Bloomberg News survey of 12 analysts for a 0.8 per cent gain.
Singapore, as one of the world’s most open economies, is poised to benefit from accelerating global growth this year that the International Monetary Fund has predicted. The improvement will be good news for the city-state’s companies that have struggled with tepid demand and rising costs, and the government may announce in its annual budget tomorrow measures to help businesses cope better while providing more social support for an aging population.
“The global economy is more or less out of the doldrums that it has been stuck in for the last few years,” Irvin Seah, an economist at DBS Group Holdings Ltd in Singapore, said before the report. “This would certainly present an opportunity for the government to focus on social-related issues.”
The Singapore dollar was little changed at 1.2637SGD against its US counterpart as of 7:51am local time.
Global growth
GDP increased 5.5 per cent last quarter from a year earlier, today’s report showed. The economy grew a revised 4.1 per cent in 2013, and the government reiterated its forecast for a 2 per cent to 4 per cent expansion this year.
The trade promotion agency today maintained its forecast for exports to rise 1 per cent to 3 per cent in 2014.
The International Monetary Fund last month raised its projection for global growth this year as expansions in the US and UK quicken. Singapore’s industrial production and non-oil domestic exports rose more than economists estimated in December.
Manufacturing grew 10.4 per cent in the fourth quarter from the previous three months, compared with a January estimate of a 4 per cent contraction. Services rose 6.1 per cent in the same period, while construction expanded 1.4 per cent.
The Monetary Authority of Singapore maintained its commitment to a modest and gradual appreciation of the currency in October, forgoing stimulus to manage price gains. While companies face domestic cost pressures from higher rentals and wages, imported inflation is expected to remain subdued, the trade ministry and central bank said last month. — Bloomberg
