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Source:
www.mti.gov.sg |
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Improved Outlook for 2007 As Growth Broadens
and Economy Diversifies |
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The Ministry of Trade and Industry announced
today that the economy is expected to grow by 7.0-8.0 per cent in 2007,
riding on the momentum of the second quarter and supported by a
favourable external environment and broad-based growth across the major
sectors. |
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Performance in Second Quarter |
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Growth picked up pace in the second quarter,
with GDP expanding by 8.6 per cent year-on-year following 6.4 per cent
in the previous quarter. |
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Growth on a seasonally-adjusted
quarter-on-quarter annualised basis increased to 14 per cent from 8.8
per cent in the first quarter. Overall, the Singapore economy grew by
7.6 per cent in the first half of 2007. |
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Growth has become more broad-based in the
second quarter, with the financial services and construction sectors
registering double-digit growth, and the manufacturing sector remaining
healthy despite a slowdown in electronics. |
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Financial services expanded by 17 per cent
in the second quarter, up from 14 per cent growth in the first quarter. |
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The banking cluster was supported by
strong growth in both the domestic segment and offshore Asian
Dollar Market, with loans to non-bank customers rising by 10 per
cent. |
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The wealth advisory cluster remained
buoyant, riding on growing affluence in the region and continued
demand domestically for professional fund management services. |
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The construction sector grew by 18 per
cent, the strongest growth in almost 10 years. Private
construction was supported by robust growth in the residential,
commercial and industrial segments while public construction was
led by housing projects. |
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Growth in the manufacturing sector
picked up pace to 8.3 per cent, with strong growth in biomedical
manufacturing and transport engineering more than making up for
the slack in electronics. |
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Increased diversification within the
manufacturing sector ¨C with electronics, chemicals, biomedical
manufacturing, transport engineering and precision engineering
acting as the main growth engines ¨C has made the sector more
resilient to industry-specific shocks. |
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Continued strong economic growth has
supported job creation. Employment grew strongly by 61,900, higher
than 49,400 in the first quarter. |
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The seasonally adjusted unemployment
rate fell to 2.4 per cent in June 2007 from 2.9 per cent March
2007. The number of workers retrenched declined to 1,600, from
2,000 in the previous quarter. |
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Labour productivity increased by 0.4
per cent following a 1.3 per cent decline in the previous quarter.
This helped to moderate the increase in unit labour cost, which
rose by 5.7 per cent in the second quarter after a 5.9 per cent
increase in the preceding quarter. |
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The unit business cost of
manufacturing also improved, rising by 1.9 per cent compared to
3.3 per cent the first quarter. |
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Stronger economic growth has also led
to some cost pressures but they are well contained. |
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The consumer price index rose by 1.0
per cent in the second quarter compared with a 0.5 per cent gain
in the first quarter. Even so, consumer price inflation for the
year as a whole is not expected to average higher than 1.5 per
cent, which is low by international standards. |
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Outlook for 2007 |
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The Ministry of Trade and Industry has
raised the full-year GDP growth forecast for 2007 from 5.0-7.0 per
cent to 7.0-8.0 per cent, taking into account a healthy external
environment, the broad-based growth momentum across major sectors,
continued growth in the composite leading index and strong
business expectations. |
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The global economic environment
continues to be healthy. Growth in the US has moderated but
remains intact in the face of problems in the sub-prime credit
markets. The Japanese and EU economies continue to recover on the
back of strong domestic demand and firm business sentiment. |
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Prospects in Asia remain robust, with
the Chinese economy growing at a rapid pace. The chief downside
risk to this favourable external outlook is the potential for
current problems in US credit markets spreading to other financial
markets and possibly dragging down consumption and investment. |
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From a sectoral perspective, growth in
financial and business services, manufacturing, and construction
is expected to be higher than earlier envisaged. |
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The driving factors underpinning this
higher growth are broad-based: strong global demand in the
biomedical, aerospace and marine industries, robust regional
demand for financial services, and a buoyant domestic property
market and construction industry with a steady pipeline of
contracts awarded. |
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The latest surveys of business
expectations show that both manufacturing and services firms
expect better business conditions in the coming half of the year. |
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Ministry of Trade and
Industry
10 August 2007 |
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More..... |
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Source:
www.mti.gov.sg Press Release
10 Aug 2007 |
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FrontPage Edition: Fri 10 August 2007
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