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S'pore can reach double digit growth for 2010, but risks inflation

S'pore can reach double digit growth for 2010, but risks inflation
By Desmond Wong | Posted: 28 April 2010 2001 hrs

	Photos 1 of 1 Singapore's CBD skyline

 
SINGAPORE: Private sector economists have given a bullish forecast for Singapore's economy. Some expect double-digit growth by year-end.

But inflation could be a risk in coming months - a view also shared by the Monetary Authority of Singapore in its twice-yearly economic review released today.

Singapore's economy expanded a strong 13.1 per cent on year in the first quarter.

And given the strong showing, some economists say double digit expansion is possible by year-end.

The government's official forecast for now is seven to nine per cent growth in 2010.

Song Seng Wun, regional economist, CIMB-GK Research, says: "If we swing positive from pharma as well, given that it's 20 per cent of manufacturing, we can continue to see manufacturing continue to show headline growth in the second quarter.

"And as a result, you could get first half growth in the region of between 11 and 14 per cent, which makes the average for the full year very likely to be in the high single digits or the low teens."

Economists that Channel NewsAsia spoke to are predicting full year growth from nine to 12 per cent.

In its latest macroeconomic review, the MAS says trade-related sectors will boost growth.

Intra-regional trade is expected to pick up with the China-ASEAN Free Trade Area deal.

But stronger growth may also raise the risk of inflation, which is expected to come in at 2.5 to 3.5 per cent this year.

Irvin Seah, assistant vice president of group research, DBS, says: "We are seeing inflationary pressure building up externally with higher fuel prices, higher commodity prices.

"Domestically, it's higher asset prices, especially the pressure coming from the property market. We also have some policy induced inflationary impact, in the form of higher COE prices."

But observers don't expect the MAS to tighten monetary policy further after its aggressive adjustment earlier this month.

MAS estimates put GDP growth at three to five percent over the next decade. Experts say this does not mean that activity is expected to slow down over the next couple of years, but rather the economy is strengthening and stabilising after 18 months of volatility.

- CNA/jy 


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S'pore SMEs more upbeat about business sentiments in coming 6 months

S'pore SMEs more upbeat about business sentiments in coming 6 months
By Travis Teo | Posted: 29 April 2010 1524 hrs

	Photos 1 of 1 Office staff walk out for lunch break at the financial district in Singapore.

 
SINGAPORE: Singapore SMEs are more positive about business sentiments in the coming six months, with more companies working at higher capacities, which could lead to higher employment.

This is the conclusion of an inaugural quarterly index for small and medium size enterprises, compiled by DP Information Group and the Singapore Business Federation.

The SBF-DP SME Index tracks both the outlook and level of economic activity of Singapore SMEs each quarter.

The partners say the index provides a forward-looking and measurable gauge of business sentiment among Singapore SMEs for the coming six months.

The index surveyed owners and management of 3,000 SMEs, covering the commerce, manufacturing, services and transport & storage sectors, which contribute some 60 per cent of Singapore's GDP.

The index score for the first quarter of 2010 is 51, up from 48 in the last quarter of 2009.

DP Information says the increase reflects expectations that the economy is improving, with manufacturing companies registering a strong 8-point jump to 55 points, compared with the previous quarter.

But DP says the reading of 51 also suggests that business sentiment is one of "cautious optimism", where SMEs' level of sustainability remains stable and unchanged compared to previous quarter.

The index score is derived from qualitative data on actual financial performance of SMEs, combined with quantitative data which includes tracking companies' turnover and profit as well as credit ratings.

- CNA/jy

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