Singapore: Singapore's economy grew 12.5 per cent in the fourth quarter of 2010, a record year in which the city state was Asia's strongest economic performer, government figures showed yesterday.

Singapore grew 14.7 per cent for the year as a whole, the figures confirmed, bounding back from a 1.3 per cent contraction in 2009 in part thanks to the biomedical sector.

"At 14.7 per cent, Singapore is the fastest growing Asian economy in 2010," said Alvin Liew, an economist with Standard Chartered Bank based in the city.

Globally, only Qatar is thought to have grown faster, with growth in the energy-rich Gulf economy projected at 16 per cent for 2010, according to the International Monetary Fund.

Within Asia, economic powerhouse China is forecast to grow by around 10 per cent this year.

Last year's growth was Singapore's best ever economic performance, surpassing the previous record of 13.8 per cent set in 1970 and within the government's projected range of 13-15 per cent.

Growth in the October-December quarter was powered largely by the manufacturing sector, which expanded 28.2 per cent from a year ago, the Ministry of Trade and Industry said in a statement.

Construction

Strength in manufacturing, which accounts for a quarter of gross domestic product (GDP), cushioned the impact of a 1.2 per cent decline in construction activity. Manufacturing growth "was led by the biomedical manufacturing cluster, which saw a strong rebound in pharmaceutical output," the ministry said.

For the service sector, which accounts for 65 per cent of Singapore's GDP, output surged 8.8 per cent in the fourth quarter.

"We continue to expect the economy to grow by seven per cent in 2011, with the services sector being the key driver of growth as well as job creation," analysts from Singapore's DBS bank said in market commentary.

Prime Minister Lee Hsien Loong, who announced the full-year growth figure in his New Year speech on Friday, called for caution after last year's exceptional showing.

US economy

"The outlook for the world economy is mixed," Lee said in his message. "We should rejoice in this exceptional performance, but please remember that it is also the result of special circumstances, and so is unlikely to be repeated soon.

"There are significant concerns: the US economy is still weak. Europe faces serious debt crises in Greece, Ireland and a few other countries."

The prime minister said growth in 2011 would likely moderate to 4.0-6.0 per cent.

Singapore's GDP, valued at 247.33 billion Singapore dollars (Dh707 billion) in 2009, is highly dependent on external trade and any slip-up in the global economy would affect the city-state's economy.

  • 14.7%: country's economic growth for whole year
  • 28.2%: expansion in manufacturing sector