Singapore's GDP soars 32% in Q1

Singapore's GDP soars 32% in Q1
11:55 AM Apr 14, 2010
SINGAPORE (AP) Singapore's economy grew at its fastest rate in at least 35 years in the first three months of 2010, bouncing back from a contraction the previous quarter as manufacturing activity more than doubled.

Gross domestic product grew at an annualized, seasonally adjusted 32.1 percent in the first quarter, the biggest leap since quarterly results began in 1975, the Trade and Industry Ministry said Wednesday.

The economy grew 13.1 percent in the first quarter from the same period a year ago, and the government boosted its 2010 GDP forecast to between 7 percent and 9 percent from between 4.5 percent and 6.5 percent, the ministry said.

"This is supernormal growth," Singaporean bank DBS said in a report.

Singapore's strong GDP numbers suggest demand from the U.S. is recovering and Asia has emerged from last year's recession as a leading driver of global growth. Singapore's economy relies on trade, finance and tourism.

The Southeast Asian island nation of 5 million people was the first Asian economy to report first quarter GDP results, while China is scheduled to do so Thursday. In the final quarter of 2009, Singapore's economy contracted by an annualized 2.8 percent.

Singapore's benchmark stock market index rose 1.6 percent Wednesday.

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.

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 Wednesday after a twice-a-year policy review that it has 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."

The government also raised its inflation forecast for this year by 0.5 percentage point 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.

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Source:
http://www.todayonline.com/Singapore/EDC100414-0000170/Singapores-GDP-soars-32-in-Q1