Singapore GDP up 9.9 percent in 2000, no shift in MAS bias

Singapore GDP up 9.9 percent in 2000, no shift in MAS bias

SINGAPORE (Reuters): Singapore's economy grew a robust 9.9 percent in 2000, slightly below an official forecast of 10.1 percent, with the outlook broadly positive for this year despite slowing growth, the government said on Thursday.

After the data came out, the Monetary Authority of Singapore (MAS) defied expectations of a shift in its monetary policy by sticking to its tightening bias to cap inflationary pressures.

The Ministry of Trade and Industry kept to its forecast for 5.0 to 7.0 percent growth in 2001 based on a "broadly positive" outlook despite the U.S. economy's sharp slowdown towards the end of last year and the downturn in the global electronics sector.

Electronics account for about 60 percent of Singapore's total exports and about half of its manufacturing output.

But some analysts said economic expansion this year could prove slightly lower than the official forecast due to deceleration in the city state's key U.S. and Japanese markets.

Chia-Liang Lian, regional economist at Merrill Lynch, said he was troubled by the decision to hold fast on 2001 growth.

"The forecast is based on the supply side. But what if the U.S. turns out to have a much more U-shaped recovery? That means Singapore would have expanded capacity without the concomitant external demand," he said.

"That could mean putting off a slowdown in 2002."

The ministry was comfortable about its 2001 estimate, its chief economist Tan Kong Yam said, assuming a "near-soft landing" in the United States, as well as new projects and more capacity in the pharmaceutical, petrochemical and electronics sectors.

"At the electronics level, even if we assume some negative growth, we are not pushing the overall growth rate very far below the 4.5 to 5.0 percent level," he told a news conference. "We do not foresee the electronics side to be that severely negative."