Singapore's GDP soars 32 percent in first quarter

ALEX KENNEDY,Associated Press Writer - Wednesday, April 14
SINGAPORE – Singapore's economy soared in the first three months of 2010, bouncing back from a contraction the previous quarter as manufacturing more than doubled.
Gross domestic product grew an annualized, seasonally adjusted 32.1 percent in the first quarter, led by a 139 percent jump in industrial production, the Trade and Industry Ministry said Wednesday.
The economy grew 13.1 percent in the first quarter from the same period a year ago, and the government boosted its 2010 GDP forecast to between 7 percent and 9 percent from between 4.5 percent and 6.5 percent, the ministry said.
Singapore's strong GDP numbers suggest Asia has emerged from last year's recession as a leading driver of global economic growth. The city-state was the first Asian country to report first quarter GDP results, while China is scheduled to do so Thursday.
"The recovery of the Singapore economy has been stronger than expected and more entrenched since the beginning of this year," the central bank said. "Looking ahead, domestic economic activity is likely to be sustained at a relatively high level."
The bank, known as the Monetary Authority of Singapore, said Wednesday that it has shifted its exchange rate policy from a 0 percent appreciation of the Singapore dollar to a "modest and gradual" appreciation in a bid to dampen inflation.
The government also raised its inflation forecast for this year by 0.5 percentage points to between 2.5 percent and 3.5 percent.
"Inflationary pressures are likely to pick up, driven by rising global commodity prices," the bank said.

Exceptionally strong growth ahead for Singapore, and stronger dollar

Singapore: Exceptionally strong growth was seen in the first quarter of 2010 and the Trade and Industry Ministry (MTI) says it now expects Singapore’s economy to grow by 7.0 to 9.0% during the current year.
The revision upwards from an earlier 4.5—6.5% GDP growth is in view of the "exceptionally strong growth for the Singapore economy" in the first quarter and the overall improved outlook for external economies for the rest of 2010, MTI said in its news release on Wednesday.
In view of the rebound of the Singapore economy and expected firm recovery with a more favourable global economic outlook the MAS will re—centre the exchange rate policy band for the Singapore dollar at the prevailing level and shift the policy band from zero percent appreciation to a modest and gradual appreciation.
The decision to allow for a stronger dollar was influenced by the tightening of the labour market with the seasonally adjusted resident unemployment rate falling from 5% in September 2009 to around its pre—crisis rate of 3% in December, and an expected pick—up of wages this year.
Overall, Singapore should see inflation in 2010 at between 2.5% and 3.5%, which is slightly higher than the 2—3% forecast earlier.
Experts say the move to move by MAS indicates that the view that domestic inflation is the concern now that economic growth has settled in.