Singapore's Economy May Expand 14.9% This Year, Central Bank Survey Shows

Singapore’s economy will probably grow at a faster pace than previously forecast this year as manufacturers boost output and consumers increase spending, a central bank survey showed.

Gross domestic product may expand 14.9 percent in 2010, according to the median forecast in a survey of 20 economists by the Monetary Authority of Singapore released today. That compares with a June estimate of 9 percent. The Southeast Asian nation may expand 5 percent in 2011, the survey showed.

Singapore’s economy is in the running to be the world’s fastest-expanding in 2010 as rising demand for goods and services prompted the government to raise growth forecasts three times this year. The central bank said in April it will allow the currency to strengthen after the economy grew at the fastest pace on record in the first quarter.

The economy will probably expand 11.6 percent this quarter from a year earlier, extending the island’s recovery from last year’s recession, the survey showed. GDP rose 18.8 percent in the three months ended June 30 from a year earlier.

Singapore’s government expects the economy to grow as much as 15 percent this year, after a record expansion of 17.9 percent in the first half.

Manufacturing will probably increase 28.7 percent in 2010, the survey showed, compared with the economists’ previous prediction of a 16.7 percent gain. Non-oil domestic exports may jump 19.5 percent this year, according to the median forecast, higher than the government’s estimate for shipments to rise as much as 19 percent in 2010.

Construction Growth

Economists were less optimistic on the outlook for Singapore’s building industry than they were in last quarter’s survey. Construction will advance 10 percent this year, less than a previous estimate for a 10.3 percent gain, they predicted.

Private consumption may climb 5.8 percent in 2010, while financial services may increase 10.6 percent, according to the median estimates.

Singapore’s unemployment rate may be 2.2 percent by the end of 2010, higher than the June projection of 2 percent, the survey showed. The city-state has added about 63,000 new jobs this year and the jobless rate is at 2.3 percent.

Consumer prices will probably rise 2.9 percent this year, according to the survey. The central bank, which uses its currency rather than interest rates to manage price gains, forecasts inflation will average 2.5 percent to 3.5 percent.

The Singapore dollar will probably end this quarter at S$1.363 versus the U.S. currency, and may strengthen to S$1.35 by the end of 2010, the survey showed. It traded at 1.354 a dollar at 11:36 a.m. local time.

To contact the reporters on this story: Shamim Adam in Singapore at sadam2@bloomberg.net

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