SINGAPORE : The Singapore economy grew by a better-than-expected 7.6 percent in the first half of the year. This was announced by Prime Minister Lee Hsien Loong in his National Day Message on Wednesday.
And based on the strong numbers, the government has raised its full-year growth forecast to between 7.0 and 8.0 percent.
The previous target was 5.0 to 7.0 percent.
Analysts say they believe the new growth target is achievable.
According to them, a half-year growth of 7.6 percent meant that the GDP expanded by 8.7 percent in the second quarter.
This was higher than the government's flash estimate for an 8.2 percent expansion, catching economists by surprise.
Alvin Liew, Economist, UOB Group, said: "We thought that there would be a downward revision because manufacturing came in weaker than expected.
"But given the numbers that we see today, the 7.6 percent first-half growth, this means most likely that construction as well as services... growth rates will be significantly revised up. In particularly, construction would have done particularly well."
A growth of 7 to 8 percent would mean the economy growing at about the same pace as the 7.9 percent clip last year.
Given the weaker-than-expected manufacturing data in June, economists say they expect the services sector to continue to serve as growth anchors.
Mr Liew said: "In particular, financial services, tourism-related services are likely to remain strong. But we're factoring a rather moderate improvement in electronics manufacturing. And given the rather volatile but still expanding pharmaceutical segment, we think that manufacturing will still contribute to growth, but not in a big way.
"For the second half, we do feel that this strong momentum of growth we see in the second quarter cannot be sustained. And we are factoring some slowdown in the third quarter. But nonetheless, the revised forecast for the government of 7 to 8 percent is still very much achievable."
The Ministry of Trade and Industry is expected to provide more details about the second quarter economic performance on Friday. - CNA/ch
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