Singapore economy slows in first quarter<\/p>\n
Bernice Han, Agence France-Presse, Singapore<\/p>\n
Singapore's economic growth slowed in the first quarter to 2.4
\npercent, official figures showed on Monday, although economists
\nsaid official full-year forecasts of 3.0-5.0 percent remain
\nachievable.<\/p>\n
The Ministry of Trade and Industry said a sharp decline in the
\nvolatile biomedical manufacturing sector was partly to blame for
\nthe subdued start to the year which compared with 6.5 percent
\ngrowth in the final quarter of 2004.<\/p>\n
On a seasonally adjusted quarterly basis gross domestic
\nproduct (GDP) contracted 5.8 percent, according to the MTI
\npreliminary figures, which are based on the first two months of
\nthe year. Full first-quarter numbers will be released in May.<\/p>\n
\"Growth of the Singapore economy eased in the first quarter of
\n2005 as the momentum from last year's economic recovery continued
\nto subside,\" the MTI said.
\nThe manufacturing sector recorded annualized growth of 3.0
\npercent in the first quarter, down from 14.1 percent in the final
\nthree months of 2004.<\/p>\n
\"Excluding biomedical manufacturing, which saw wide production
\nfluctuations in the first two months, activity in the
\nmanufacturing sector eased somewhat from the previous quarter but
\ngrowth was still healthy,\" the MTI said.<\/p>\n
The struggling construction sector continued to decline in the
\nfirst quarter but the contraction of 6.5 percent was slower than
\nthe 8.4 percent fall in the final quarter of 2004.<\/p>\n
Services grew 3.5 percent in the first quarter, down from 4.8
\npercent in the previous three months.<\/p>\n
After recording stellar growth of 8.4 percent in 2004, the
\ngovernment had forecast Singapore's would expand by a more
\nsustainable 3.0-5.0 percent this year.<\/p>\n
Economists said those forecasts were still on track, with
\nstronger export orders for electronics products expected to start
\ndriving Singapore's economic momentum from the second quarter.<\/p>\n
Singapore's trade-driven economy derives a large part of its
\nwealth from hi-tech exports and signs that the global slump in
\nthe electronics cycle is about to end will be important for the
\ncity-state, they said.<\/p>\n
\"We could see a rebound in the following quarters,\" said
\nLeslie Tang, an economist at UOB Kay Hian brokerage.<\/p>\n
\"The electronics cycle will bottom out in the second quarter
\nand we expect a pick-up in the second-half.\"<\/p>\n
Tang is forecasting second quarter growth of 2.8 percent year-
\non-year and maintaining a full year projection of 4.5 percent.<\/p>\n
Chua Hak Bin, a senior regional economist at DBS Group in
\nSingapore, agreed that strong electronic orders were expected
\nthroughout the rest of 2005.<\/p>\n
\"Recent macro data confirms that the slump in global
\nelectronics demand, which started in June last year, is starting
\nto turn around,\" Chua said.<\/p>\n
\"Singapore's electronics industrial production grew 6.9
\npercent in the first two months of the year, higher than the 5.0
\npercent registered in the fourth quarter of last year.<\/p>\n
\"We are increasingly confident that the electronics downturn
\nis coming to an end and we expect more encouraging signs in the
\nweeks ahead,\" Chua said.<\/p>\n
Song Seng Wun, regional economist at G.K. Goh brokerage, also
\nexpects a better second quarter performance on stronger exports
\nof tech-related goods.<\/p>\n
\"I expect tech exports to stabilize,\" said Song, who puts
\nsecond quarter growth at 10 percent.<\/p>\n
UOB Kay Hian brokerage's Tang said high world oil prices were
\nnot a factor in the modest economic start for Singapore.<\/p>\n
\"We have not really felt the impact (of high oil prices)
\nyet ... if it stays up we will feel it in the fourth quarter,\" he
\nadded.<\/p>",
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