SINGAPORE: Singapore’s economic growth accelerated in the first half and will maintain its “momentum” for the rest of the year as higher global demand for electronics fuels exports, the central bank said.
“The global economy is likely to maintain its resilience,” Goh Chok Tong, the Monetary Authority of Singapore’s chairman, said in the bank’s annual report released yesterday. “Singapore’s economic momentum should be sustainable for the rest of 2006.”
Demand for music players and mobile phones is fuelling orders at component makers such as Chartered Semiconductor Manufacturing Ltd., supporting expansion in export-driven Asian economies including Singapore. Prime Minister Lee Hsien Loong’s government expects exports of electronics and drugs to help growth in Southeast Asia’s fourth-biggest economy accelerate to as much as 7% this year from 6.4% in 2005.
Gross domestic product grew 7.5% in the second quarter from a year earlier, following a 10.7% gain in the first, the trade ministry said in a July 10 report.
“We are expecting a modest slowdown in the momentum in the second half and that is tied to a possible lull in global technology demand,” said Sim Moh Siong, an economist at Citigroup Inc in Singapore. “The inflation story is turning out much better than expected, and should stay within the official range this year.”
The central bank yesterday reaffirmed the government’s forecasts for 5% to 7% economic growth this year. The Monetary Authority also maintained its forecast for inflation to average between 1% and 2% this year compared with 0.5% in 2005.
“The prospects for continued economic growth in the quarters ahead appear intact,” Heng Swee Keat, managing director at the Monetary Authority, said at a media briefing yesterday. “While US growth may moderate somewhat, overall external demand is held up by improving conditions in Europe and Japan, as well as continued robust expansion in China and India.” – Bloomberg