Singapore's economy powered to 9.4 percent growth in the third quarter, the government said yesterday, as the city-state moved to control inflation and the prime minister dismissed claims of overheating.
Singapore, one of Asia's wealthiest economies, was on track to meet the government's full-year growth target following its performance over the three months to September compared with a year earlier, the trade ministry said.
During the second quarter, Singapore's GDP expanded a revised 8.7 percent, it said.
The data came as the Singapore dollar traded at 10-year highs against the greenback after the central bank signaled a slight tightening of policy in the face of rising inflation, dealers said.
The bank targets the exchange rate rather than interest rates to control inflation. A stronger local currency makes imports cheaper, helping to control the rise in consumer prices.
In August the government raised its full-year growth target to between 7 percent and 8 percent, but analysts said yesterday that growth could be even better than that.
"I don't think the economy as a whole is overheating," Prime Minister Lee Hsien Loong was quoted as saying in the Today newspaper while on a visit to Hungary.
The Monetary Authority of Singapore (MAS), the de facto central bank, said inflationary pressures had picked up, with rents and wages increasing amid buoyant domestic economic conditions and rising global oil and food prices.
Full-year inflation is now projected to reach between 1.5 percent and 2 percent, up from the 0.5 percent to 1.5 percent expected when the bank issued its last policy review in April, MAS said.
For next year, headline inflation is seen rising initially to about 3.5 percent before easing to between 2 percent and 3 percent, MAS said.
Against this backdrop, MAS said it would continue to seek "a modest and gradual appreciation" of the local dollar.
"In our assessment, this policy stance will remain supportive of economic growth while capping inflationary pressures and ensuring price stability over the medium term," MAS said.
The trade ministry said third-quarter growth in the manufacturing sector reached an estimated 12.3 percent, up from 8.3 percent in the preceding quarter, helped by the biomedical sector and transport engineering, which includes oil rigs and ships.
Growth in the construction sector is estimated to have eased to 15.5 percent compared with 18.8 percent last quarter, while the services sector rose an estimated 8.1 percent, against 8.4 percent in the second quarter, the ministry said.
On a quarter-on-quarter seasonally adjusted annualized basis, real GDP growth slowed to 6.4 percent from 14.4 percent in the second quarter, the trade ministry said.
"It's still a solid growth," Action Economics chief economist David Cohen said.
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