A tale of two economic reports

January 5, 2003
Singapore Democrats

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Singapore’s economic growth slowed in Q4
Associated Press

Singapore’s economic growth slowed in the final quarter of 2003, government figures showed Friday.

The Ministry of Trade and Industry said gross domestic product – the total of goods and services produced – expanded an estimated 7.9 percent between October and December, down from 17 percent in the previous quarter.

The fourth-quarter growth figure was below analysts’ expectations of between 11 percent and 13 percent.

Singapore’s economy posted 0.8 percent full-year growth in 2003 thanks to the strong second-half rebound. GDP had contracted 9.8 percent in the second quarter due to fallout from the outbreak of severe acute respiratory syndrome and the U.S.-led war in Iraq.

“The healthy external environment underpinned economic growth in the fourth quarter,” the ministry report said. “In the final months of 2003, growth in the major developed economies and the regional economies benefited both the manufacturing and services sectors in Singapore.”

The fourth-quarter GDP figure was preliminary. Final results will be unveiled in February.

The government expects growth to accelerate to between 3 percent and 5 percent in 2004, though some economists consider that range to be conservative.

“I think we’re in for GDP growth of about 4 to 4.5 percent in the first quarter,” leading to GDP growth of 5 percent to 5.5 percent in 2004, said IDEAGlobal regional economist Nizam Idris.

Economy grew at healthy 7.9% pace in fourth quarter
Narendra Aggarwal
Straits Times
3 January 2004

Analysts expect momentum to carry into the second half, and this year’s GDP to hit the upper end of the 3-5% forecast

The Singapore economy has posted its second straight quarter of expansion, growing at a robust 7.9-per-cent annual pace in the final quarter of last year.

Increased production of key export items such as semiconductors, disk drives and pharmaceuticals helped keep growth humming along.

While a slower rate than the superfast 17-per-cent expansion in the previous quarter, economists said that growth momentum was strong.

The good economic expansion could go on at least into the first half of the new year and could carry on into the second half, they said.

This year’s growth is expected to come in at the upper end of the 3 to 5 per cent official estimate, economists polled by The Straits Times said yesterday.

‘The economic recovery is firmly on track,’ said OCBC economist Suan Teck Kin.

‘The growth momentum will be quite strong going forward. We are quite upbeat on the new year.’

Releasing advance estimates for the fourth quarter yesterday, the Ministry of Trade and Industry (MTI) said that on a year-on-year basis, gross domestic product (GDP) expanded by 3.7 per cent over the same period of 2002.

Overall growth for last year came in at 0.8 per cent, as revealed by Prime Minister Goh Chok Tong in his New Year message to the nation.

Economists said that the quarter-on-quarter 7.9-per-cent growth over the past three months had added significantly to the rebound in the third quarter in the wake of the devastating Sars outbreak earlier in the year.

The manufacturing sector and services-producing industries expanded by 2.5 per cent and 0.8 per cent respectively for the whole year, said MTI.

The construction sector yet again proved a laggard, contracting by 10.4 per cent – the second year in a row it has posted a double-digit shrinkage.

MTI said that in the final months of last year, Singapore’s manufacturing and services sectors were lifted by growth both in the major developed and also regional economies.

Manufacturing expanded 7.5 per cent in the last quarter, with MTI noting: ‘The electronics and biomedicals clusters showed strong growth.

Performance of the other manufacturing clusters also improved from the previous quarter.’

Activity in the construction sector showed few signs of a pick-up.

The sector was estimated to have contracted by 8.9 per cent in the fourth quarter.

As for the services-producing industries’ estimated 3.2-per-cent growth in the fourth quarter, increased trade, car sales and financial services were prime drivers of growth.

MTI said financial services were boosted by increased activity in Asian currency units, foreign exchange and fund management.

MTI’s advance estimates are largely based on data for October and November.

Further details on fourth quarter and full-year sectoral performances, sources of growth, inflation, employment and productivity will be released next month in the Economic Survey of Singapore.