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Singapore posts 8.4%
growth
SINGAPORE - The
Singaporean economy looks to have finally emerged
from its SARS-induced coma of 2003, posting a
robust 8.4% growth rate in 2004, fittingly on the
back of a stellar performance of the biomedical
sector. The expansion was the fastest for four
years, coming off a low base in 2003, when the
Severe Acute Respiratory Syndrome crisis pulled
down growth to just 1.4%. But the Ministry of
Trade and Industry (MTI) maintained a lower
forecast of a 3-5% expansion for 2005, citing high
oil prices and a slowdown in semiconductor
exports.
The MTI said total demand rose by
17.5% in 2004, with strong growth on both the
external and domestic fronts of 19.6% and 11.6%
respectively. Much of last year's growth flowed
from strong performances by the manufacturing
sector, up 13.9% year-on-year, and the hotel and
restaurant sector, up by 12.4%. Economic growth
was particularly strong in the fourth quarter,
with gross domestic product expanding by 7.9% on
an annualized basis, triple the government's
earlier estimate. During the quarter, all sectors,
excluding construction, booked growth.
Construction registered a 6.5% drop in 2004,
though an improvement over the 9.5% decline in
2003.
The services sector saw growth slow,
to 4.8%, in the last three months of 2004. For the
year as a whole, services expanded 7.5% compared
with 2003's 1.3% growth. Wholesale and retail
performed the best among services industries,
gaining 10.7% in the fourth quarter for a
full-year expansion of 14.6%, more than double the
6.7% growth in 2003. Among sub-sectors, financial
services performed the worst, gaining 0.4%
compared with the 2.9% growth in July-September.
"Turnover in the domestic stock market remained
lackluster, while fund management activities were
curtailed by the recent trend of rising interest
rates and poor earnings reports. Similarly, bank
loans to non-bank customers slowed," the ministry
said.
The transport and communication
sectors picked up from a 1.8% decline in 2003 to
record growth of 9.1% last year as air traffic
numbers rose. The 17.5% rise in total demand is a
massive jump over the 4.8% in 2003. Leading the
charge within the manufacturing sector last year
was the biomedical manufacturing cluster, which
soared 25.7%, closely followed by a 24% growth
spurt in the transport engineering industry.
Biomedicals account for nearly one-fifth of
Singapore's manufacturing GDP. Singapore has been
offering tax incentives to drug makers of late to
reduce its dependence on electronics
manufacturing.
The city-state's labor
market posted a revival in 2004, with total
employment growing by 66,200 during the year,
helping to keep the nation's unemployment rate for
the whole of 2004 at around 4% - down from the
4.7% registered in 2003. Singapore's Employers
Federation President Stephen Lee was quoted by
Channel NewsAsia as saying: "The first half of the
year looks quite good. Even if things were to
weaken a bit compared to last year, it will still
be a very decent year."
Singapore's
external trade rose by 22.5% in 2004, a strong
improvement from the 9.6% growth in 2003. It
reached a historic high of S$580 billion (US$353
billion), propelled by strong economic recovery in
the United States, Japan and the EU as well as a
robust global electronics demand. In volume terms,
total trade increased by 21.7% in 2004, after a
10.6% gain in 2003. Singapore's overall balance of
payments registered a larger surplus of S$20.4
billion in 2004, compared to S$11.8 billion in the
preceding year. The bigger surplus mainly
reflected the decline in outflows from the capital
account and a slight improvement in the current
account surplus, the MTI said in a statement. As a
result, Singapore's official foreign reserves rose
by $20.7 billion to reach $183.8 billion at the
end of 2004.
According to Trade and
Industry Minister Lim Hng Kiang, the economy will
continue to gain momentum through this year.
Speaking at the Singapore Chinese Chamber of
Commerce and Industry's Chinese New Year
celebrations on Wednesday, he said the Year of the
Monkey turned out to be a good one. As more
Singaporean companies go global, he said, they
would penetrate new markets.
The Singapore
stock market had a relatively good showing in 2004
as well. The Straits Times Index rose 1.04% on
Tuesday to end at 2,140.16, a new four-year high -
the second in two days. Overall, stocks rose over
13%. Outlook for the coming year remains divided.
While some are upbeat on telecommunications,
airlines, manufacturing, banking and property,
others believe risks lie ahead for local stocks.
(Asia Pulse) |
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