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September from a year ago, official estimates showed Monday, boosting
recovery hopes in other Asian economies hit by the global slowdown.
It was the trade-dependent economy's first year-on-year expansion in
five quarters and was based on July and August numbers. The estimate
is expected to be revised when the full September numbers are
available next month. "It's a good sign for the rest of Asia," said
Dariusz Kowalczyk, chief investment strategist with financial
services firm SJS Markets Hong Kong. " The recovery in the global
economy has had a meaningful impact on regional growth." Singapore
was the first Asian economy to go into recession as a result of the
financial crisis that began in the US housing sector -- but also
among the earliest beneficiaries of improved demand in industrial
countries this year. "A clear but modest recovery is underway
globally, at least for the next three or four quarters," the ministry
of trade and industry said in a statement. While gross domestic
product (GDP) will fall in 2009 , the government amended its
full-year forecast to a contraction of 2.0 to 2.5 percent, well
below the previous estimate of negative 4.0 to 6.0 percent growth.
"One-off factors such as restocking activities and fiscal stimulus
measures will continue to support growth in the near term," the
ministry said. On a seasonally adjusted quarterly basis, GDP surged
14.9 percent following a 22 percent expansion in the second quarter
to June, the ministry said. It was the second successive
quarter-on-quarter growth period. Growth in the third quarter was
driven by expansion in the biomedical and electronics manufacturing
industries, which are the key pillars of Singapore's industrial
sector. Manufacturing, which accounts for almost a quarter of
Singapore's GDP, grew 8.3 percent in third quarter from a year ago
and expanded 34.9 percent on a quarterly basis. The services industry
shrank 2.4 percent on the year but expanded 9.5 percent on a
quarterly basis. The construction sector surged 12.4 percent
year-on-year but fell 0.6 percent from the previous three months,
the ministry said. "Growth was driven by the continued expansion of
biomedical and electronics manufacturing output, and improvements in
the trade-related and tourism sectors of the economy on the back of
a gradual stabilisation in global economic conditions," it said. The
Monetary Authority of Singapore (MAS), the country's central bank,
said in a separate statement Monday it was maintaining the policy of
"zero percent appreciation" for the Singapore dollar in light of the
modest recovery. The MAS carries out its monetary policy through the
Singapore dollar, which is weighted against a basket of currencies of
major trading partners within an undisclosed trading band known as
the nominal effective exchange rate (NEER). "MAS will therefore
maintain the current policy stance of a zero percent appreciation of
the NEER policy path," it said. Song Seng Wun, a regional economist
with CIMB- GK Research, said Singapore was "firmly out of recession"
with GDP expanding in the third quarter. He has narrowed his 2009
growth forecast for the city-state to a contraction of 2.0 percent
from minus 3.0 percent previously. The third-quarter data boosted
local share prices, with the benchmark Straits Times Index closing
up 1.05 percent at to 2 , 680.47. Singapore's economy sank into
recession in the second quarter of 2008 as the global financial
crisis unfolded, hurting demand for exports to its major markets
including the United States, Japan and the European Union. Its worst
previous recession since gaining independence in 1965 was in 2001
when GDP contracted 2.4 percent.
