Singapore sees growth momentum
November 20th, 2009 | 
Author: By Se Young Lee from Wall Street Journal, 19 November 2009
Singapore’s economy expanded slower than initially estimated in the third quarter, but the government expects growth to resume next year as the global recovery progresses.
Still, the government retained a cautious outlook, warning that the pace of the rebound will likely be sluggish and possibly uneven amid persisting uncertainties in external conditions.
The island state’s gross domestic product in the three-month period ended Sept. 30 grew by 14.2% from the second quarter in seasonally adjusted, annualized terms, government data showed Thursday. While weaker than the government’s advance estimate for a 14.9% expansion, the revised figure matched the median forecast of economists polled.
From a year earlier, the economy grew 0.6%, slower than the government’s initial estimate of a 0.8% expansion. The economists polled by Dow Jones Newswires had tipped a 0.5% rise under such terms.
“Singapore’s economic outlook for 2010 will be closely linked to global conditions,” the Ministry of Trade and Industry said in a statement. “The sluggish recovery in advanced economies suggests a slower pace of growth, and the uncertainties in the recovery in external private final demand may signal an uneven recovery.”
The ministry noted that while the pace of the recovery will likely be stronger in Asia, conditions in the advanced economies remains fragile.
“Growth momentum thus far has been driven by targeted fiscal stimulus measures and inventory cycle adjustments, but these factors are likely to taper off in the second half of 2010,” the ministry said. “Even though there are some initial signs of a recovery in private demand, the durability of the recovery remains uncertain.”
The government also revised up its inflation forecast for 2010, now expecting the consumer price index to rise by between 2.5% and 3.5% compared with a rise of between 1% to 2% previously tipped.
Trade promotion agency International Enterprise Singapore said in a separate statement Thursday that non-oil domestic exports will likely contract between 11% and 10% this year compared with a fall of between 12% and 10% seen previously.
“There are stronger signs of stabilization in external demand, but the levels are still low,” the agency said in the statement. “For the last quarter of 2009, Singapore’s trade is expected to continue on its path of recovery.” – WSJ
Republished from Wall Street Journal
Posted in Editorial
this growth thing. is it real growth or relative growth?
i mean, if a company lost extremely a lot last year, it easier to get growth the next year even if it still in the red but less red? is this correct?
eg. FlyDogs INC lost 300 million last year, this year it still lost, 100 million. Compared to last year, is this considered GROWTH of 200 million?
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Nangista on Fri, 20th Nov 2009 1:23 pm
Good point and agree with you.
Just look at puplished comments of MTI statements – it does NOT make any sense to me to be positive at all. And the Singapore share market greeted the news with a BIG YAWN of indifference. It is NOT hard to figure why.
MTI announcing that the economy expanded by 0.6% in the third quarter from the same period a year ago. BUT MTI FAILED TO EMPHASIS THE SUBSTANCE OF TRUTH IN REALITY THAT THIS 0.6% year-on-year comparison was attained only by reason of almost exclusively due to the $20.4 billion stimulus spending. And in spite of this huge injection, the economy will still shink by about 3% for the current year. What does this translate to in reality.
Taking 2008 GDP figure of $240 billion and assuming 3% GDP decline for 2009, the forecast of our GDP for 2009 must be 232.8 billion. From this figure, take of another $20.4 billion in stimulus spending, the GDP figure ( without stimulus spending boost) would have decline to $212.4 billion ( $232.8 b – 20,4b) or an awesome 11.5% decrease compared to 2008 figure.
Forecast growth is 3% to 5% for 2010, the economy can hardly be said to be GROWING. The reason is simple. Year on year comparison is based on LAGGED COMPARISON of forecast ( and actual) GDP figures in March 2010 and June 2010 TO VERY DEPRESSED BASE of 2009 economic downturn of March and June quarter in 2009. At it bottom of March 2009, SINGAPORE’S GDP FIGURE (without the stimulus spending impact) would have decline by 11.5% as calculated above. ASSUMING OPTIMISTIC OUTCOME OF 5% year on year – the ACTUAL GDP WOULD NOT HAVE RECOVERED EVEN HALF THE LOSS SUSTAINED IN 2009.
That is why MSM had this inconspicuous comment WITHOUT EXPLANATION …MTI doe snot expect the recovery to be smooth sailing or for the GROWTH TO REBOUND TO THE PRE-CRISIS LEVEL.
That means that MTI knows the GDP figure for 2010 is unlikely to match the GDP figures for 2008 – probably by the long mile because a 5% recovery from the lowest point in 2009 (compared to the March 2008 statistics) DOES NOT RECOVER EVEN HALF THE LOSS OF NEARLY 11.5% GDP experienced in 2009 (without the stimulus spending).
It is therefore not surprising that MTI thinks of possible blip in the fourth quarter which might shrink compared to third quarter owing to potentially weaker outout from the drug sector and the slow down of inventory restocking globally.
Summing up the reality is 4th qtr decline. And maybe some recovery in 1st qtr 2010 ( which will be positive compared against first qtr 2009) and again 2nd qtr 2010 even if flat would still be much better than 2nd qtr 2009 on a year-on-year basis again. And maybe slight growth in 3rd and 4th qtr of 2010 ( IF NO SURPRISE DOUBLE DIP IN US AND EUROPE)such to enable us to report a false positive GDP growth of 3% to 5% for 2010 SIMPLY BECAUSE 2009 IS SUCH A HORRIBLE ADVERSE YEAR.
If there is surprise downturn in US and EU, I am sure we will experience a steep NEGATIVE decline in GDP in 2010 INSTEAD OF A FALSE POSITIVE GROWTH.
The talk about optimism of 3% to 5% must be election talking up of the economy. Perhaps, it is a false pretext to pay civil servants a 1/2 month bonus ahead of an election announcement next month.
Anyone surprised at all???
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Regardless of whether SG got growth or no growth, most important is our wallet got growth. As long as your pay rise is more then the inflation, even if SG continue to experience negative growth is not important.
But after so long of stagnant pay & CPF cut, will the sun rise from the West?
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REAL grwoth or not,GDP is a shitty STATS these days to reflect
how the average joe fair.
I don’t care honestly if they reported growth as 20 pct and yet
those who wanna to make an honest living still can’t real work.
Those who are voted and hold office cannot in these times of mass unemployment merely report improvements in GDP in their
performance reports.Of greater significance should be job-creation-DECENT EMPLOYMENT for their citizens.
Similarly,what’s the point of CEOs reporting increae in bottom lines,only when those incrementals were mere cost-savings from
retrenchment rather than actual increase in revenues or other more meaningful cost-cutting measures…it’s so easy to bully
the workers especially when “unions” are as good as useless!
CREATION of jobs/employment must indeed be the more significant
measure of the performance of current day political office-bearers and CEOs.
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