Singapore set to revise Q4 GDP upwards

Shipping vessels berth at the Pasir Panjang terminal in Singapore December 18, 2008. — Reuters picShipping vessels berth at the Pasir Panjang terminal in Singapore December 18, 2008. — Reuters picSINGAPORE, Feb 15 — Singapore’s economy likely expanded at a faster pace during the fourth quarter of 2012 than was earlier estimated, helped by higher production of oil rigs and pharmaceuticals in the final weeks of the year.

The government said today that the gross domestic product (GDP) data would be released at 8 am (0000 GMT) on February 22.

According to the median estimate of economists polled by Reuters, the city-state’s GDP likely grew by 1.2 per cent from a year ago in October-December 2012, faster than the advance estimate of 1.1 per cent.

“This implies growth for the full year 2012 could be revised up to 1.4 per cent versus the advance estimate of 1.2 per cent, which should further reinforce the tightening bias in policy,” Citigroup economist Kit Wei Zheng said in a note to clients.

Singapore’s GDP probably expanded by 2.1 per cent at an annualised and seasonally adjusted pace in the fourth quarter from the preceding three months, higher than the advance estimate of 1.8 per cent, according to economists who provided quarter-on-quarter estimates.

Singapore, a key Asian business and financial centre, has been suffering from slow growth amid declining demand for its exports and weakness in the financial services.

But inflation remains high by historical standards amid a shortage of accommodation and soaring car prices caused by government efforts to limit the number of cars on its roads.

Government measures to make it harder for firms to bring in low-cost workers from abroad is also adding to cost pressures.

The Monetary Authority of Singapore’s current policy stance is to allow a modest and gradual appreciation of the Singapore dollar against an undisclosed basket of currencies to curb inflationary pressures, and most analysts expect the central bank to maintain its stance when it publishes its next monetary policy statement in April.

The central bank uses the exchange rate rather than interest rates to influence growth and inflation because Singapore’s trade flows dwarfs the tiny domestic economy.

Singapore last month reported December industrial output nearly matched the year-earlier level as higher production of drugs and oil rigs offset continued weakness in electronics, beating the forecasts of most economists.

Citi’s Kit said the December data showed manufacturing contracted by 1 per cent in the fourth quarter from a year ago, better than the 1.5 per cent decline stated in the advance estimate, which was based largely on data for October and November.

This, together with upward revisions to historical data, meant the sector performed better than initially expected.

Manufacturing accounts for about a quarter of Singapore’s GDP. — Reuters



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