Jul 11, 2013

    Singapore economy likely grew faster in Q2

    SINGAPORE'S economy probably expanded at a faster clip in the second quarter, helped by a rebound in pharmaceutical production and continued strength in financial services.

    According to the median forecast of 13 economists polled by Reuters, advance estimates tomorrow will likely show Singapore's gross domestic product (GDP) rose by a seasonally-adjusted and annualised 8.3 per cent in the second quarter from the first, accelerating from the 1.8 per cent gain in the January-March period.

    GDP likely grew by 2 per cent year-on-year in the second quarter, compared with the anaemic expansion of 0.2 per cent in the first quarter, over the same period last year.

    The boost to second-quarter economic growth will come from pharmaceuticals, where production rose 46.4 per cent in April and 25.2 per cent in May from year-earlier levels.

    Electronics, the main drag on manufacturing last year, stabilised in April and May, according to industrial production data.

    Economists said the haze that enveloped Singapore late last month - caused by massive forest fires in Indonesia - probably had a minimal impact on the overall economy.

    "It is possible that the monthly cost estimates of the current haze episode could be between $50 million and $100 million for the food and beverage (sector) and $60 million for tourism, while health-related expenditure could increase by around $15 million," said Ms Selena Ling, head of treasury research at OCBC Bank.

    "This is equivalent to only 0.05 per cent of our GDP."