S'pore Lifts 2007 GDP Growth Forecast To 7-8%

Source : The Business Times, August 8, 2007

Singapore's government on Wednesday raised its 2007 economic growth forecast to 7-8 per cent, from 5-7 per cent previously, putting it on a level with last year's strong expansion.

The upgrade had been widely predicted by economists and followed better-than-expected second-quarter data last month as the economy expanded at its fastest pace in two years on the back of a manufacturing upswing and a building boom.

'For the whole year, MTI (the Ministry of Trade and Industry) has raised its growth forecast to between 7 and 8 per cent,' Prime Minister Lee Hsien Loong said in a speech broadcast on state television on the eve of Singapore's National Day.

Mr Lee said that Singapore's $210 billion (US$139 billion) economy, which expanded by 7.9 per cent last year, grew a better-than-expected 7.6 per cent in the first six months of this year.

'These figures imply that a forecast for 8 per cent growth in the full-year is conservative,' said David Cohen, an economist at Action Economics.

According to preliminary figures released on July 10, Singapore's economy grew an annualised, seasonally adjusted 12.8 per cent in the second quarter. Compared to a year earlier, GDP grew 8.2 per cent, based mainly on data from April and May.

But now, economists expect the second-quarter data to be revised upwards on Friday when the Ministry of Trade and Industry releases final growth figures at 8am (0000 GMT).

'It looks like they revised the preliminary year-on-year figure for the second quarter up to 8.7 per cent, unless they revised the first quarter as well. That would translate into a seasonally adjusted growth rate of almost 15 per cent' for the second quarter, Mr Cohen said. -- REUTERS