Singapore’s economy grew more than expected in the third quarter, as a rush for all things linked to artificial intelligence (AI) drove up demand for computer chips, preliminary data released yesterday showed.
A healthy rebound in the key manufacturing sector powered the 4.1 percent year-on-year growth in the July-to-September period, the Singaporean Ministry of Trade and Industry said.
Economists had projected growth of less than 4 percent.
Photo: Roslan Rahman, AFP
Manufacturing, which includes computer chips, expanded 7.5 percent year-on-year, bouncing back from a 1.1 percent decline in the previous three months.
The government in August upgraded its economic growth forecast for this year from 1 to 3 percent to 2 to 3 percent.
Meanwhile, the Monetary Authority of Singapore said it would “maintain the prevailing rate of appreciation” of the Singaporean dollar, as the risks to inflation are “more balanced compared to three months ago.”
Singapore uses the exchange rate — the Singaporean dollar is pegged to a basket of currencies of its key trading partners — to deal with inflation, as it imports most of its needs.
“For the rest of 2024, Singapore’s growth should be sustained by the ongoing upswing in the electronics and trade cycles, as well as the easing in global financial conditions,” the central bank said.
Separately, Singapore yesterday moved to stop a S$2.2 billion (US$1.68 billion) deal that would have allowed German insurance giant Allianz SE to buy a majority stake in a local insurer.
Allianz in July announced a “pre-conditional voluntary cash general offer” to buy at least 51 percent of Singapore’s Income Insurance Ltd at S$40.58 per share as it seeks to strengthen its presence in Singapore and Asia.
Income Insurance had said it needed Allianz’s financial muscle to compete better in the industry.
The deal raised fears among some locals that being majority owned by a private company would dilute Income Insurance’s social mission of providing affordable insurance.
A former cooperative that became a non-listed company in 2022, Income Insurance’s largest shareholder is NTUC Enterprise Co-operative Ltd, a holding entity for the various social enterprises under the labor movement.
“The government has assessed the proposed transaction and has decided that it would not be in the public’s interest for the transaction, in its current form, to proceed,” Singaporean Minister of Culture, Community and Youth Edwin Tong (唐振輝) told parliament.
The ministry “is not satisfied that Income will be able to continue fulfilling its social mission after the proposed transaction,” he added.
A bill was tabled in parliament yesterday to allow the central bank to “withhold approval of the sale on grounds of public interest when it involves a current or former cooperative insurer,” Singaporean Prime Minister Lawrence Wong (黃循財) said on Facebook.
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