Singapore's Economy Grows 8.6 Percent On Year In Second Quarter

Source : AsiaOne News, Aug 10 2007















A parachutist freefalls with a major construction site beneath him in Singapore Thursday, Aug. 9, 200. Singapore's economy grew 8.6 percent in the second quarter, driven by strength across most industries, according to government figures released Friday. Growth became more broad-based in the second quarter, with the financial services and construction sectors registering double-digit growth. (AP Photo/Wong Maye-E)

SINGAPORE (AP) -- Singapore's economy grew 8.6 percent in the second quarter from the same period in 2006, and the government said Friday it expects expansion to continue even as global credit risks come to the fore.

Gross domestic product grew 14.4 percent from the first quarter in seasonally-adjusted annualized terms, faster than the advance estimate of 12.8 percent, the Ministry of Trade and Industry said in a statement.

A Dow Jones Newswires poll of economists had forecast a 12.3 percent expansion.

The second quarter figures came after Prime Minister Lee Hsien Loong Wednesday said the city-state's 2007 growth forecast had been upgraded to a range of 7-8 percent from a previous 5-7 percent target.

The government expects broad-based expansion to continue through the second half, but acknowledges as key risks the danger of a spillover from the U.S. subprime mortgage market or a spike in oil prices.

To keep the financial system on track, the central bank said it is willing to add cash to the market if global credit concerns prompt a liquidity squeeze in the city-state.

The Bank of Japan followed Thursday's moves by the European Central Bank and Federal Reserve with an injection of cash into its market to prevent a credit crunch, and the Australian central bank also followed suit.

"We will stand ready to inject liquidity," Ong Chong Tee, Deputy Managing Director at the Monetary Authority of Singapore told reporters at a press conference. "If there are liquidity bottlenecks certainly we could be willing."

Singapore's central bank regularly acts in the money market to ensure sufficient liquidity.