Singapore's economy grew 8.4% last year

Asian Economic News, Feb 22, 2005

SINGAPORE, Feb. 17 Kyodo

Singapore's economy posted 8.4 percent growth last year over the previous year in a sharp rebound from a slump induced by the outbreak of a deadly flu-like epidemic in 2003, the government said Thursday.

But the Ministry of Trade and Industry, which released the data, said growth is expected to moderate to between 3 to 5 percent this year -- still in line with its earlier forecast -- on concerns such as a possible hard landing in China, lingering high oil prices and a slowdown in global demand for electronics, a key Singapore export.

Official flash estimates released earlier this year showed that the economy grew 8.1 percent last year in terms of gross domestic product, and the upward revision is mainly due to a spurt in the biomedical sector in December, which boosted growth in the final quarter.

Commenting on China's economic prospects, it said ''despite taking a series of steps to cool its rapid economic growth, the risk of a hard landing for China still remains.''

One consolation is expectation of continued healthy growth in the world's developed economies, it said.

The Singapore economy grew by a revised 1.4 percent in 2003 -- the year when the economy was battered by the SARS epidemic, a downturn in world demand for electronics and global economic uncertainties due to the Iraq war.

The manufacturing sector grew 13.9 percent last year over the previous year, wholesale and retail trade 14.6 percent, hotels and restaurants 12.4 percent, transport and communications 9.1 percent, financial services 6 percent, and business services 2.2 percent. Construction continued to languish by declining 6.5 percent.

Inflation rose 1.7 percent last year after rising only 0.5 percent in 2003. The ministry said the biggest increases were seen in healthcare and educational costs.