Singapore's economy may have contracted by 16%, say economists

[sleek]

Singapore's economy may have contracted by 16%, say economists
By Chris Howells | Posted: 13 October 2010 2215 hrs

SINGAPORE: Singapore's economy may have contracted by 16 per cent on-quarter, which would be the biggest fall on record. The manufacturing sector, led by pharmaceuticals has slowed, following the rapid growth of the first half.

This is according to the third quarter median forecasts from a Channel NewsAsia poll of 10 economists.

This comes ahead of the gross domestic product (GDP) flash estimates to be released by the Ministry of Trade and Industry (MTI) on Thursday.

With global growth starting to show signs of slowing, Singapore's leading indicators have also taken a knock.

The country's industrial output rose a modest 8.1 per cent on year in August, its slowest rate in 9 months while Singapore's purchasing managers index or PMI has also remained below the expansion level of 50 points for the second straight month in September.

Experts said this could mean year-on-year GDP growth will likely slow to 10.5 per cent, significantly slower than the country's first half growth of 18 per cent.

Experts say the expected decline in the biomedical sector may drag the economy to its biggest quarterly contraction since records began.

Alvin Liew, an economist with Standard Chartered Bank believes that the decline in the biomedical sector may drag the economy to its biggest quarterly contraction since records began.

"In the first half of the year, manufacturing had a phenomenal rebound, however, a large part of it is coming in from this surge in pharmaceuticals. Our expectation is that there will be a key drag coming in from manufacturing especially from biomedical," he said.

However, economists say that the stronger sector is likely to be in services, which is expected to expand moderately.

This is due to tourism remaining resilient, as well as financial services benefiting from stronger markets and a higher loan growth.

"[In the services sector], we did get a boost from the two integrated resorts that opened. If you look at the tourism numbers, they seem encouraging. I think there will be some lift from all the recent YOG, F1 and some of the other tourist events we've had over the last couple of months, so I think in terms of tourist related services, I think that should fare fairly well," said Selina Ling, Head of Treasury Research and Strategy with OCBC Bank.

The Monetary Authority of Singapore will also announce its 6-monthly policy review tomorrow.

Economists are not expecting any changes in the current policy of a modest and gradual appreciation of the Singapore dollar, which was implemented at the last meeting in April.

Observers say the central bank is taking a wait and see approach in the face of global economic uncertainty and rising capital inflows into Asia, which has caused regional currencies to rally in recent months.

Median from 10 economists:

Q/Q Seasonally Adjusted Annual Rate

-12.2, -14.9, -15.4, -15.5, -16.0, -16.6, -17.0, -18.0, -21.1, -29.9 = -16.3%

Y/Y

5.8, 9.0, 10.1, 10.4, 10.5, 10.5, 10.8, 10.9, 11.1, 12.0 = +10.5%

-CNA/ac

[sleek]

Singapore's GDP expands by 10.3% on-year, contracts by 19.8% on-quarter in Q3
Posted: 14 October 2010 0819 hrs

SINGAPORE: Singapore's GDP expanded by 10.3 percent on a year-on-year basis in the third quarter of 2010.

On a quarter-on-quarter basis the economy contracted by 19.8 percent, a reversal from the growth of 27.3 percent in the previous quarter.

The advance estimates released by the Ministry of Trade and Industry (MTI) on Thursday said that the Singapore economy remains on track to achieve the overall growth forecast of 13 to 15 percent for the whole of 2010.

Commenting on the sectoral decline on a quarter-on-quarter basis, MTI said the manufacturing sector contracted by 57 percent in the third quarter, after expanding by 67 percent in the preceding quarter.

It attributed the decline largely to the biomedical manufacturing cluster, where some pharmaceutical companies switched to producing a different value-mix of active pharmaceutical ingredients. MTI also cited some plant maintenance shutdowns during the quarter.

The construction sector also contracted by 12 percent, compared to an expansion of 29 percent in the preceding quarter. MTI said this was mainly due to the completion of key commercial and industrial building projects earlier in the year.

The services-producing industries registered a modest sequential growth of 1.6 percent, following a 13 percent expansion in the previous quarter.

MTI said growth for the rest of the year will be underpinned by a number of industry-specific factors.

It said continued growth in global demand for electronic products will lend some support to the electronics and precision engineering clusters.

It added that increasing visitor arrivals, drawn by the Integrated Resorts, will continue to bolster tourism in Singapore.

MTI will release the preliminary GDP estimates for the third quarter of 2010, including performance by sectors, sources of growth, inflation, employment and productivity, in November 2010.

- CNA/de

[tericia]

sounds like good news again for those waiting on the sides

Singapore's economy may have contracted by 16%, say economists
By Chris Howells | Posted: 13 October 2010 2215 hrs

SINGAPORE: Singapore's economy may have contracted by 16 per cent on-quarter, which would be the biggest fall on record. The manufacturing sector, led by pharmaceuticals has slowed, following the rapid growth of the first half.

This is according to the third quarter median forecasts from a Channel NewsAsia poll of 10 economists.

This comes ahead of the gross domestic product (GDP) flash estimates to be released by the Ministry of Trade and Industry (MTI) on Thursday.

With global growth starting to show signs of slowing, Singapore's leading indicators have also taken a knock.

The country's industrial output rose a modest 8.1 per cent on year in August, its slowest rate in 9 months while Singapore's purchasing managers index or PMI has also remained below the expansion level of 50 points for the second straight month in September.

Experts said this could mean year-on-year GDP growth will likely slow to 10.5 per cent, significantly slower than the country's first half growth of 18 per cent.

Experts say the expected decline in the biomedical sector may drag the economy to its biggest quarterly contraction since records began.

Alvin Liew, an economist with Standard Chartered Bank believes that the decline in the biomedical sector may drag the economy to its biggest quarterly contraction since records began.

"In the first half of the year, manufacturing had a phenomenal rebound, however, a large part of it is coming in from this surge in pharmaceuticals. Our expectation is that there will be a key drag coming in from manufacturing especially from biomedical," he said.

However, economists say that the stronger sector is likely to be in services, which is expected to expand moderately.

This is due to tourism remaining resilient, as well as financial services benefiting from stronger markets and a higher loan growth.

"[In the services sector], we did get a boost from the two integrated resorts that opened. If you look at the tourism numbers, they seem encouraging. I think there will be some lift from all the recent YOG, F1 and some of the other tourist events we've had over the last couple of months, so I think in terms of tourist related services, I think that should fare fairly well," said Selina Ling, Head of Treasury Research and Strategy with OCBC Bank.

The Monetary Authority of Singapore will also announce its 6-monthly policy review tomorrow.

Economists are not expecting any changes in the current policy of a modest and gradual appreciation of the Singapore dollar, which was implemented at the last meeting in April.

Observers say the central bank is taking a wait and see approach in the face of global economic uncertainty and rising capital inflows into Asia, which has caused regional currencies to rally in recent months.

Median from 10 economists:

Q/Q Seasonally Adjusted Annual Rate

-12.2, -14.9, -15.4, -15.5, -16.0, -16.6, -17.0, -18.0, -21.1, -29.9 = -16.3%

Y/Y

5.8, 9.0, 10.1, 10.4, 10.5, 10.5, 10.8, 10.9, 11.1, 12.0 = +10.5%

-CNA/ac