The Singapore government has upgraded its economic growth forecast for this year to 13-15 percent, exceeding estimates of about 10 percent growth for regional powerhouse China.
The sharp upgrade from the previous estimate of 7.0 percent to 9.0 percent growth in gross domestic product (GDP) was due to the strong demand for manufactured exports, especially biomedical products.
The Ministry of Trade and Industry (MTI) said GDP growth in Q1 was 16.9 percent from 2009, while growth in Q2 is estimated at 19.3 percent.
The growth would moderate in the second half of 2010 due to the European sovereign debt problems and slowdown in the US recovery, said MTI.
On an annualised and seasonally adjusted basis, the country’s economy expanded 26.0 percent in the second quarter. The manufacturing sector grew by about 45.5 percent year-on-year, due to strong expansion in the electronics cluster and a surge in the biomedical manufacturing cluster output.
Singapore also increased its forecast for this year’s total trade growth between 17 percent and 19 percent from the earlier forecast of between 14 percent and 16 percent growth.
The forecast for non-oil domestic exports (NODX) has also been increased from the earlier projection of between 15 percent and 17 percent to between 17 percent and 19 percent.
One of the reasons for the upward revisions was better-than-expected second quarter trade performance, said trade promotion agency IE Singapore.
The year-on-year expansion in both Singapore’s NODX and total trade was better than expected for Q2 2010, at 28 percent each.
Another factor that contributed to the growth was the robust trade growth of Asian economies, which enjoyed buoyant growth in the first half of 2010, with the International Monetary Fund (IMF) upgrading Asia’s real GDP growth forecast for this year to 7.5 percent, up from the 6.9-percent forecast in April.
Global semiconductor demand also grew at a faster rate compared in 2009, said the agency.
IE Singapore said NODX grew by 29 percent on-year in June following the 24 percent growth in May, due to non-electronic and electronic domestic exports.
Electronic NODX grew by 44 percent in June on-year; thanks to higher domestic exports of PC parts, ICs, and parts of ICs, while non-electronic NODX rose by 21 percent, due to higher domestic exports of petrochemicals, pharmaceuticals and specialised machinery.