Singapore economy surges for 2nd straight quarter

[October 12, 2009]  SINGAPORE (AP) -- Singapore's economy surged for a second straight quarter, and the government boosted its 2009 growth forecast, as manufacturing cemented the city-state's emergence from recession.

Gross domestic product grew an annualized, seasonally adjusted 14.9 percent in the third quarter, following a jump of 22 percent the previous quarter, the Trade and Industry Ministry said Monday.

The economy also expanded from a year earlier for the first time since the third quarter of 2008, the ministry said. GDP was up 0.8 percent from the July-September quarter of 2008.

"A clear but modest recovery is under way globally, at least for the next three or four quarters," the ministry said. "However, economic activity will probably remain below pre-crisis levels because of the drag on demand in the developed economies."

The government boosted its 2009 GDP forecast to a contraction of between 2 percent and 2.5 percent from a previous expectation of a fall between 4 percent and 6 percent.

Singapore relies on trade, finance and tourism to sustain one of Asia's highest living standards. Manufacturing soared an annualized, seasonally adjusted 35 percent in the third quarter while services grew 9.5 percent.

The growth in the second and third quarters is the most of any six-month period since the government began releasing quarterly GDP figures in 1975, said Robert Prior-Wandesforde, senior Asia economist at HSBC in Singapore.

"A regional, if not world, trade recovery has begun and looks set to continue," said Prior-Wandesforde, who expects the Singapore economy to grow 6.5 percent next year.

The central bank said Monday it left unchanged its exchange rate policy, favoring neither an appreciation nor depreciation of the Singapore dollar. The bank, known as the Monetary Authority of Singapore, said it expected inflation near zero percent this year and between 1 percent and 2 percent next year.

[Associated Press; By ALEX KENNEDY]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.