S'pore economic growth to slow

S'pore economic growth to slow

SINGAPORE (AFP): The Singapore economy is expected to expand
by a much slower pace of 2.6 percent year-on-year in the last
quarter of 1996 for a projected annual six percent growth,
government officials said yesterday.

The economy had expanded by 3.2 percent in the third quarter,
the city state's worst growth rate in a decade, due to weakness
in the crucial manufacturing sector, they told a media briefing.

Trade-driven Singapore's gross domestic product growth in the
first quarter was 11.4 percent and 7.5 percent in the second
quarter.

Some analysts had earlier projected that fourth quarter growth
could dip to as low as 1.9 percent.

"The government is not coming up with a public position on the
fourth quarter figure but mathematically speaking it should be
2.6 percent," an official of the Ministry of Trade and Industry
told AFP after the briefing.

He said that the figure was derived after considering the
government's six percent annual growth forecast for 1996 as well
as the performance of the economy over the last three quarters.

The government had forecast that the economy would expand by
7.5 percent to 8.5 percent in 1996 but in August revised it to
seven to eight percent.

The officials said yesterday that economic growth in the third
quarter was brought down by a broad-based weakness in the key
manufacturing sector.

Manufacturing posted its first negative growth of 4.3 percent
in four years during the July-September period. The last time
Singapore's manufacturing sector posted negative growth was in
the first quarter of 1992.

Singapore had been hit by a global slowdown of the electronics
industry, the lynchpin of manufacturing, triggered by softening
of demand, excess capacity and an oversupply of components like
chips.

The electronics industry, which grew at an explosive rate of
23 percent and 12 percent in the first and second quarters
respectively, posted a negative 1.7 percent growth in the third
quarter.

Figures released at yesterday's briefing showed production
dipping in all the key manufacturing industries during the July-
September period, with the notable exception of petroleum
refining.

Singapore's most recent recession was in the mid-1980's when
GDP growth turned negative for the whole of 1985 and the first
quarter of 1986.

Economic growth recovered into positive territory of 1.4
percent in the second quarter of 1986, 4.1 percent in the third
quarter and seven percent in the final quarter. Since then growth
had not fell below four percent.

Singapore's economy grew by 8.8 percent in 1995 and more than
10 percent in each of the previous two years.