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Singapore growth quells recession fears

Jan 02 2013 10:11
Singapore - Singapore's economy grew in the fourth quarter, avoiding a technical recession despite disappointing growth figures for 2012, government data showed on Wednesday.

Gross domestic product (GDP) rose 1.1% year-on-year in the three months to December from zero growth in the previous quarter, the Ministry of Trade and Industry said.

On a quarter-on-quarter basis, the trade-dependent economy expanded by a seasonally adjusted annualised 1.8%, reversing a revised 6.3% contraction in the third quarter. 

The figures are based on estimates.

Analysts feared the economy had likely slipped into a technical recession after two successive quarters of contraction. Prime Minister Lee Hsien Loong said in a speech on 1 January 2013 that GDP rose 1.2% for the full year.

This was below the government's target for the economy to expand 1.5-2.5%

"Overall growth of just over 1.0% is low by historical standards but it's still growth," said CIMB Research economist Song Seng Wun.

The manufacturing sector shrank by an annualised 10.8% quarter-on-quarter as the European debt crisis and the sluggish US economy weakened global demand. Manufacturing contracted by 0.2% in 2012.

Construction also contracted 8.9% quarter-on-quarter but grew 8.8% on year. The services sector expanded 1.2% overall in 2012.

Premier Lee said GDP was expected to grow 1.0-3.0% in 2013 due to expected continued weakness in global demand.

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