SINGAPORE: Singapore’s economy grew 12.5 percent in the fourth quarter of 2010, a record year in which the city state was Asia’s strongest economic performer, government figures showed Monday.
Singapore grew 14.7 percent for the year as a whole, the figures confirmed, bounding back from a 1.3 percent contraction in 2009 in part thanks to the biomedical sector.
"At 14.7 percent, Singapore is the fastest growing Asian economy in 2010," said Alvin Liew, an economist with Standard Chartered Bank based in the city.
Globally, only Qatar is thought to have grown faster, with growth in the energy-rich Gulf economy projected at 16 percent for 2010, according to the International Monetary Fund.
Within Asia, economic powerhouse China is forecast to grow by around 10 percent this year.
Last year’s growth was Singapore’s best ever economic performance, surpassing the previous record of 13.8 percent set in 1970 and within the government’s projected range of 13-15 percent.
Growth in the October-December quarter was powered largely by the manufacturing sector, which expanded 28.2 percent from a year ago, the Ministry of Trade and Industry said in a statement.
Strength in manufacturing, which accounts for a quarter of gross domestic product (GDP), cushioned the impact of a 1.2 percent decline in construction activity.
Manufacturing growth "was led by the biomedical manufacturing cluster, which saw a strong rebound in pharmaceutical output," the ministry said.
For the service sector, which accounts for 65 percent of Singapore’s GDP, output surged 8.8 percent in the fourth quarter.
"We continue to expect the economy to grow by seven percent in 2011, with the services sector being the key driver of growth as well as job creation," analysts from Singapore’s DBS bank said in market commentary.
Prime Minister Lee Hsien Loong, who announced the full-year growth figure in his New Year speech on Friday, called for caution after last year’s exceptional showing.
"The outlook for the world economy is mixed," Lee said in his message. "We should rejoice in this exceptional performance, but please remember that it is also the result of special circumstances, and so is unlikely to be repeated soon.
"There are significant concerns: the US economy is still weak. Europe faces serious debt crises in Greece, Ireland and a few other countries."
The prime minister said growth in 2011 would likely moderate to 4.0-6.0 percent.
Singapore’s GDP, valued at 247.33 billion Singapore dollars (191 billion US) in 2009, is highly dependent on external trade and any slip-up in the global economy would affect the city-state’s economy.
Its GDP shrank 1.3 percent in 2009 because of the global downturn when demand from the United States and other developed economies collapsed.
"Singapore has had a truly remarkable recovery from the global financial crisis and has record growth numbers to prove it," said Leif Eskesen, a chief regional economist with Hongkong and Shanghai Banking Corporation.
"However, we are now going to enter more ‘normal’ times," said Eskesen, who is predicting growth of 5.2 percent for this year.
The ministry said in the statement it would provide more details of the economy’s performance for the fourth quarter and 2010 next month.
