Posted 31 December 2010
Singapore’s economy expanded at a record 14.7 percent in 2010, Prime Minister Lee Hsien Loong said Friday, as the city-state recovered sharply from last year’s recession.
“The Singapore economy recovered strongly in 2010,” the prime minister said in his annual New Year message.
“This is a dramatic rebound from the negative growth last year. We should rejoice in this exceptional performance, but please remember that it is also the result of special circumstances, and so is unlikely to be repeated soon.”
It was the best performance ever for Singapore, surpassing the previous record 13.8 percent growth achieved in 1970 and also earned the city-state the distinction of being Asia’s best performing economy in 2010.
“At 14.7 percent, Singapore is the fastest growing Asian economy in 2010,” said Alvin Liew, an economist with Standard Chartered Bank who had forecast a growth of 14 percent.
China, which is forecast to grow by around 10 percent this year, is expected to release its full-year economic data in January while Japan will give its preliminary figures in mid-February.
The annual 14.7 percent surge announced by Prime Minister Lee is at the top end of the government’s growth forecast of 13-15 percent and in the fourth quarter, the economy grew 12.5 percent over the same period last year.
For next year, growth will moderate to 4.0-6.0 percent, Mr Lee said.
Apart from a resurgence in export demand, particularly in pharmaceuticals, this year’s opening of two new integrated resorts injected extra vigour into the economy, analysts said.
“Apart from China and India, I don’t think the rest have shown the kind of spectacular rebound from the financial crisis as Singapore,” said Song Seng Wun, a regional economist with CIMB Research Pte Ltd.
“The opening of the two casinos was the icing for the services sector,” he told AFP. The services sector account for 65 percent of Singapore’s gross domestic product (GDP).
Since the two casinos opened early this year, the city-state has drawn record visitors every month to its shores and this has provided a massive boost to the tourism-related industries, analysts said.
“Even for the latest month, it was record (visitors) and surely that is translating into actual contribution to the economy,” said Liew from Standard Chartered Bank.
“There is a spillover impact to hotels, food and beverage business and other tourism-related industries in general.”
Singapore’s GDP shrank 1.3 percent last year because of the global downturn when demand from the US and other developed economies collapsed.
Its GDP, valued at S$247.33 billion in 2009, is highly dependent on external trade and any slip-up in the global economy will affect the city-state’s economy.
“The outlook for the world economy is mixed,” Mr Lee said in his message.
“There are significant concerns: the US economy is still weak. Europe faces serious debt crises in Greece, Ireland and a few other countries.”
However, Asia is set to continue to charge ahead strongly led by the regional giants China and India which should benefit the Singapore economy, he said.
“China and India are forging ahead, and countries in Southeast Asia are growing steadily,” the Singapore leader said.
“Hopefully Asia will continue to do well despite the weakness in developed countries, and create a favourable regional environment for Singapore.”