RTTNews - Singapore's second quarter gross domestic product surged from the previous quarter, underpinned by strong performance by the manufacturing sector, an official report said Tuesday.
The Ministry of Trade and Industry said GDP grew a seasonally adjusted 20.7% sequentially in the second quarter, reversing a 12.2% contraction in the first quarter. Economists expected a growth of 19.2%.
Manufacturing output grew strongly by 49.5% after a contraction of 18.5% in the first quarter. The growth was largely due to a surge in production in pharmaceutical ingredients, leading to an overall jump in biomedical output. The momentum in the construction sector also picked up in the second quarter, growing 32.7%, driven by growth in the public and private construction activities.
The financial services sector also bettered its performance, rising 22.8% in the three months to June and providing an overall lift to the services sector, which grew by 8.7%. Modest growth was seen in other service producing sectors, with the exception of hotels and restaurants.
Year-on-year, the GDP contracted at a slower pace of 3.5% in the second quarter following a 9.5% fall in the first quarter, with the second quarter's GDP decline not as worse as the 4% drop expected by economists.
The Ministry of Trade said the second quarter growth was in line with estimates made on July 14. However, the ministry expressed caution whether the pick up in growth in the volatile biomedical sector as also the financial sector, could be sustained through the second half of the year.
The Ministry held the economic outlook for 2009 unchanged, expecting the economy to shrink between 4% and 6% this year.
On the external front, several forward looking indicators like the sentiment-sensitive indicators turned positive. In the U.S, there were signs of the housing market bottoming out, and similar improvements were seen in other advanced countries.
There were also a few signs of the economies of Singapore's key export markets improving, but without a turnaround in the demand-led indicators of these countries, any economic recovery in the second half of the year will probably be sluggish and modest, the MITI said.
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