Sat, Jan 01, 2011 - Page 11 News List

Singapore posts record annual growth of 14.7%

ASIA RISING:Regardless of the West’s sluggish economic recovery, the Singaporean PM said he expected Asia to forge ahead, led by the regional giants of China and India


Singapore’s economy expanded at a record 14.7 percent last year, Singaporean Prime Minister Lee Hsien Loong (李顯龍) said yesterday, as the city-state recovered sharply from the recession of 2009.

“The Singapore economy recovered strongly in 2010,” the prime minister said in his annual New Year message.

“This is a dramatic rebound from the negative growth last year. We should rejoice in this exceptional performance, but please remember that it is also the result of special circumstances, and so is unlikely to be repeated soon,” he said

It was the best performance ever for Singapore, surpassing the previous record 13.8 percent growth achieved in 1970 and also earned the city-state the distinction of being Asia’s best performing economy last year.

“At 14.7 percent, Singapore is the fastest growing Asian economy in 2010,” said Alvin Liew, an economist with Standard Chartered Bank who had forecast growth of 14 percent.

China, which is forecast to grow by around 10 percent this year, is expected to release its full-year economic data this month, while Japan will give its preliminary figures in mid-February.

The annual 14.7 percent surge announced by Lee is at the top end of the government’s growth forecast of 13 percent to 15 percent and in the fourth quarter, the economy grew 12.5 percent over the same period last year.

This year, growth will moderate to 4 percent to 6 percent, Lee said.

Apart from a resurgence in export demand, particularly in pharmaceuticals, last year’s opening of two new huge casino complexes also injected extra vigor into the economy, analysts said.

“Apart from China and India, I don’t think the rest have shown the kind of spectacular rebound from the financial crisis as Singapore,” said Song Seng Wun (宋城煥), a regional economist with CIMB Research PTE Ltd.

“The opening of the two casinos was the icing for the service sector,” he said.

The service sector accounted for 65 percent of Singapore’s GDP.

Since the two casinos opened early this year, the city-state has drawn a record number of visitors every month to its shores and this has provided a massive boost to tourism-related industries, analysts said.

“Even for the latest month, it was record [visitors] and surely that is translating into an actual contribution to the economy,” said Liew from Standard Chartered Bank.

“There is a spillover impact to hotels, food and beverage business and other tourism-related industries in general,” he said.

Singapore’s GDP shrank 1.3 -percent in 2009 because of the global downturn when demand from the US and other developed economies collapsed.

Its GDP, valued at S$247.33 billion (US$191 billion) in 2009, is highly dependent on external trade and any slip-up in the global economy affects the city-state’s economy.

“The outlook for the world economy is mixed,” Lee said in his message. “There are significant concerns: The US economy is still weak. Europe faces serious debt crises in Greece, Ireland and a few other countries.”

However, Asia is set to continue to charge ahead strongly, led by the regional giants China and India which should benefit the Singapore economy, he said.

“China and India are forging ahead and countries in Southeast Asia are growing steadily,” the Singaporean leader said.

“Hopefully Asia will continue to do well despite the weakness in developed countries, and create a favorable regional environment for Singapore.”

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