SINGAPORE: Singapore's economy expanded 6.1 percent on-quarter in October-December owing to a surge in manufacturing, the Ministry of Trade and Industry said on Thursday, revising its previous estimation of a contraction and lifting overall growth in 2013 to 4.1 percent.
The MTI had last month estimated a 2.7 percent contraction in the fourth quarter based on preliminary data from October and November, but a ramp up in production and exports in December prompted the upward revision.
On a year-on-year basis, the Singapore economy grew by 5.5 per cent in the fourth quarter of 2013, easing slightly from the 5.8 per cent growth in the preceding quarter.
Robust fourth quarter performance boosted annual GDP growth in 2013 to 4.1 percent, better than the government's earlier revised forecast for 3.5-4.0 percent expansion.
The better-than-expected outcome was due to strong growth in the manufacturing sector.
The star performer in the fourth quarter, the manufacturing sector grew by 7 per cent on a year-on-year basis, extending the 5.3 per cent growth seen in the previous quarter.
Growth was supported by improvements in the electronics cluster and continued expansion of the transport engineering cluster.
Growth was also seen in the wholesale and retail trade sector.
It expanded by 7.3 per cent in the fourth quarter, extending the 6.3 per cent growth in the previous quarter.
The finance and insurance sector grew by a robust 9.7 per cent, following the 10 per cent growth in the previous quarter.
Looking ahead, the MTI said the Singapore economy is expected to post modest growth in 2014 with externally-oriented sectors such as manufacturing and wholesale trade likely to continue to recover and provide support to growth,together with the recovery in global demand.
However, it cautioned that tight labour conditions could weigh on growth in some labour-intensive domestically-oriented sectors.
The MTI maintained its forecast for the economy to expand 2.0-4.0 percent this year against the backdrop of a sustained but slow recovery in the US and the eurozone, and a projected moderation in China's growth.
It expects key ASEAN economies to remain resilient despite recent pressures on their financial markets and currencies.
Ow Foong Pheng, Permanent Secretary for MTI, said: "Countries like Indonesia and Malaysia have taken concrete steps to strengthen their fiscal positions, such as through subsidy rationalisation. Second, improvements in the advanced economies should help to support the exports of ASEAN economies."
While Singapore's total trade declined by about half a percent to S$980 billion in 2013, economists are positive on the outlook for Singapore's exports.
Edward Lee, Regional Head of Research at StanChart, said: "If you look at the last couple of years, it is domestic activity boosting overall GDP headline growth. So this year the profile is a bit different, not just for Singapore. In fact across the region, how we are seeing is - external profile, external contribution to growth will be higher this year."
He expects to see a slowdown for domestic activity across the region. - AFP/CNA/sf/de
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