S'pore may post double-digit growth

S'pore may post double-digit growth

Martin Abbugao, Agence France-Presse, Singapore

Singapore may achieve double-digit economic growth this year, its highest rate in a decade, a cabinet minister said Friday, as robust export numbers for August gave credence to his projection.

"The good news is that Singapore's economy is recovering," Manpower Minister Ng Eng Hen said in a speech to a telecommunications union.

"Singapore may even register double-digit economic growth this year. More new jobs will be created."

It was the first time a cabinet minister has publicly said the economy, which is rebounding sharply from the impact of the Severe Acute Respiratory Syndrome (SARS) crisis last year, could grow in the double-digit range.

The last time Singapore's gross domestic product (GDP) enjoyed such growth was in 1993 when it rose more than 11 percent and in 1994 when it expanded above 12 percent.

GDP contracted in 1998 due to the Asian financial crisis and in 2001 following a recession. Despite SARS, the economy managed to chalk up 1.1 percent growth in 2003.

A median forecast of private economists surveyed last month by the Monetary Authority of Singapore, the city-state's central bank, said the economy should grow 8.4 percent this year and slow down to 5.0 percent in 2005.

Singapore's elder statesmen Lee Kuan Yew has said the economy could post a sustainable annual growth rate of 4.0-6.0 percent in the next decade, lifted by the giant economies of China and India.

Non-oil domestic exports (NODX) for August released by the government trade body International Enterprise Singapore on Friday gave credence to Manpower Minister Ng's projection.

The export numbers beat economists' forecasts, growing 29 percent year-on-year on the back of robust sales of electronics and pharmaceuticals.

The rate is the strongest since a 30.7 percent expansion in December 2003 and was better than market estimates ranging between 20.3 and 27.4 percent.

Non-oil domestic exports for the month totaled S$11.474 billion (US$6.8 billion). Total trade in August grew 28.1 percent year-on-year to S$49.576 billion.

David Cohen, an economist with research house Action Economics, said double-digit growth this year was possible.

"With continued growth like this, we can certainly make it to the 10 percent level," he told AFP.

"I think this (NODX growth) is an encouraging number. It will support the statement by the manpower minister."

Song Seng Wun, a regional economist with GK Goh brokerage, agreed that double-digit growth is possible -- but only if the pharmaceuticals sector performs strongly for the rest of the year amid forecasts for a moderation in global electronics demand.

"It is possible if the pharmaceuticals sector continues to surprise on the upside and (there is) manufacturing growth of 22- 24 percent in the second half of this year," he said.

"It's quite demanding."

Song said export growth has peaked and should slow in the last four months of the year.

"How much of a moderation depends on the performance of pharmaceuticals. That's really the wild card," he said, apparently referring to the fact that pharmaceutical plants are closed for long periods for cleaning and maintenance after each production cycle.

The pharmaceuticals sector is an emerging pillar of the Singapore economy after the government embarked on an effort to reduce dependence on electronics.

Singapore serves as a production base and regional headquarters for many of the industry's leading global players such as Pfizer, GlaxoSmithKline, Merck Sharpe and Dohme, Wyeth and Schering Plough.