Singapore’s economy grew at its fastest pace in more than five years in the fourth quarter last year, driven by a surge in manufacturing as demand for exports recovered.
GDP rose an annualized 12.3 percent in the three months to December from the previous quarter, rebounding from a contraction of 0.4 percent, the Singaporean Ministry of Trade and Industry said in a statement yesterday.
That was higher than the government’s estimate last month of a 9.1 percent gain and compares with a median forecast of 12.6 percent in a Bloomberg survey of eight economists.
GDP rose 2.9 percent in the fourth quarter from a year earlier, the ministry said.
The economy expanded 2 percent last year, higher than a previous forecast of 1.8 percent, it said.
Singapore, one of Asia’s most trade-dependent nations, is benefiting from a recovery in Chinese demand, with exports and industrial output climbing in the fourth quarter.
The outlook is uncertain, though, because global demand remains weak and the US has threatened to impose trade barriers on nations such as China.
The Singaporean government is forecasting expansion of between 1 percent and 3 percent this year, and is embarking on strategies to sustain average growth rates of between 2 percent and 3 percent in coming years.
“The improved momentum seen in the manufacturing sector towards the end of 2016 is expected to be sustained into 2017, supported by a continued recovery in the global demand for semiconductors and semiconductor equipment,” the ministry said.
While world growth is projected to pick up slightly this year, “uncertainties and downside risks in the global economy remain,” it said.
The services industry, which accounts for about two-thirds of the economy, rose an annualized 8.4 percent in the fourth quarter from the previous three months, led by a 36.5 percent jump in output in the financial services sector, the ministry said.
Manufacturing surged an annualized 39.8 percent, it said.