Strong Growth Recorded for Singapore’s Economy

SINGAPORE ~ Singapore’s economy grew 6 percent in the first quarter compared to the same period last year, coming in at the top end of forecasts, official figures showed.

Preliminary estimates showed gross domestic product expanded 7.2 percent on a quarter-on-quarter, seasonally adjusted annualized basis, compared with a 7.9-percent gain in the three months to December.

“The Singapore economy continued to grow at a healthy pace,” the Trade and Industry Ministry said in a statement.

Analysts had forecast first quarter growth at 5.2-6 percent year-on-year.

The construction sector led the way, growing 7 percent year-on-year, up from a 4.7-percent increase in the fourth quarter.

The construction industry is currently enjoying a boom after years in the doldrums, boosted by government plans to build two multibillion-dollar casinos and a rebound in property prices.

Elsewhere, the manufacturing sector grew 6.1 percent in the first quarter, lifted by a pickup in the electronics and chemicals industries as well as continued strong growth in transport engineering.

The services sector also expanded by 6.1 percent, led by financial services, wholesale and retail trade.

In a separate statement, the central bank said its policy of allowing a “modest and gradual” appreciation of the local dollar would be maintained.

“While domestic cost pressures have emerged in some segments of the economy, they remain relatively contained and overall inflationary pressures are expected to stay low,” the Monetary Authority of Singapore (MAS) said in its biannual policy statement.

“The MAS will maintain the policy of a modest and gradual appreciation of the Singapore dollar … in the period ahead. There will be no re-centering of the policy band, or any change to its slope or width.”

The MAS, which conducts monetary policy through the local currency rather than by changing interest rates, said annual inflation should be in the range of 0.5-1.5 percent this year, similar to 1 percent in 2006 despite an increase in the goods and services tax, and rising rentals.

It repeated the government’s forecast for the economy to expand 4.5-6.5 percent this year after 7.9 percent in 2006.

The preliminary growth estimates are computed largely from January and February. The government will release a full first-quarter report in May.

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