Singapore’s economy grows above expectations

Early estimates show that Singapore’s economy grew by 3.9 percent in the second quarter of 2005.

This growth is much better than expected, especially after first quarter data showed that the economy had shrunk by 5.5 percent in that quarter from the last quarter of 2004.

That had been the Singapore economy’s weakest performance since the second quarter of 2003, at the height of the SARS outbreak.

The service sector grew by 4.2 percent in the second quarter over the same quarter last year, but the construction sector contracted by 1.4 percent.

The manufacturing sector, however, which suffered in the first quarter as well as in May, actually grew by 3.5 percent in the second quarter because of April’s good performance.

Singapore’s gross domestic product expanded in the second quarter by 12.3 percent over the first quarter.

All of this eases concerns that Singapore was on the way to a recession.

Analysts now think that Singapore’s economy will revive during the second half of 2005 on an increased demand fro electronics around the world - electronics are Singapore’s largest export - and possibly on increasing exports in the pharmaceutical sector.

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