Singapore’s economy grew at its fastest rate in at least 35 years in the first three months of this year, bouncing back from a contraction the previous quarter as manufacturing activity more than doubled.
GDP grew at an annualized, seasonally adjusted, 32.1 percent in the first quarter from the previous quarter, the biggest leap since quarterly results began in 1975, the Trade and Industry Ministry said yesterday.
The economy grew 13.1 percent in the first quarter from the same period a year ago and the government boosted its GDP forecast for this year to between 7 percent and 9 percent from between 4.5 percent and 6.5 percent, the ministry said.
PHOTO: REUTERS
“The recovery of the Singapore economy has been stronger than expected and more entrenched since the beginning of this year,” the central bank said. “Looking ahead, domestic economic activity is likely to be sustained at a relatively high level.”
Singapore’s strong GDP numbers suggest demand from the US is recovering and Asia has emerged from last year’s recession as a leading driver of global growth.
The city-state was the first Asian country to report first-quarter GDP results, while China is scheduled to do so today.
Industrial production jumped 139 percent from the previous quarter, led by electronics and biomedical industries, while the service sector grew 11 percent, the ministry said.
Singapore’s economy relies on trade, finance and tourism.
The preliminary first quarter GDP results were based mostly on data from January and February, and may be revised when the government announces complete results next month, the ministry said.
The central bank, known as the Monetary Authority of Singapore, said yesterday after a twice-a-year policy review that it had shifted its exchange rate target from a zero percent appreciation of the Singapore dollar to a “modest and gradual” appreciation in a bid to dampen inflation.
“The move is fully justified, not only by the enormous strength of Q1 GDP, but the likely sustainability of the recovery,” said Robert Prior-Wandesforde, senior Asia analyst for HSBC.
“The Asian recovery has become self-sustaining,” Prior-Wandesforde said.
The government also raised its inflation forecast for this year by 0.5 percentage points to between 2.5 percent and 3.5 percent.
“Inflationary pressures are likely to pick up, driven by rising global commodity prices,” the central bank said after its policy review meeting.
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