Singapore Raises 2006 GDP Outlook after Strong Q1
Byline: MIA SHANLEY
SINGAPORE, May 17 (Reuters) -- Singapore's economy grew faster than expected in the first quarter, backed by sustained demand for electronics goods and a stronger services sector, leading the government to raise its 2006 growth forecast to 5-7 percent.
The trade-dependent economy expanded at an annualized rate of 6.8 percent in the first quarter, the Ministry of Trade and Industry (MTI) said on Wednesday, beating the 4.3 percent pace forecast by analysts in a Reuters poll.
The pace was also five times faster than the government's advance estimate of an annualized 1.2 percent released on April 10. The government's previous estimate for full-year growth was 4-6 percent.
"Domestic demand has picked up, and we expect it to remain relatively strong," Khor Hoe Ee, Assistant Managing Director at the Monetary Authority of Singapore, told a news conference.
He said low unemployment and the government's "Progress Package" -- cash and social benefits for Singapore citizens included as part of this year's budget -- would help boost business sentiment and lift retail sales, especially in the second half of the year.
Cheang Kok Chung, director at the MTI, said robust demand in the semiconductor sector continued to drive electronics output.
Singapore is home to semiconductor firms such as Chartered Semiconductor Manufacturing Ltd., which are churning out chips to meet strong demand for a range of products including mobile phones, digital cameras and personal music players.
While many analysts had worried that the current upswing in the global tech-cycle could lose steam as early as the second quarter, the government said business sentiment had improved.
"Companies are more optimistic about electronics. They are much more positive compared to three months ago," Tan Choon Shian, Director of the Economic Development Board, said at the news conference.
Financial markets were firmer. …