Singapore's GDP Contracts 3.2 Percent in Fourth Quarter on Weak Manufacturing.
Singapore's economy contracted the first time in more than four years in the fourth quarter as weakness in manufacturing outweighed windfall growth from a construction boom, the government said Wednesday.
Singapore's economy shrank 3.2 percent from the third quarter on a seasonally adjusted annualized basis, the Ministry of Trade and Industry's advance estimate showed. It expanded 4.4 percent in the July-September quarter compared to the second.
A Dow Jones Newswires poll of economists had forecast a 4.2 percent rise in the final quarter of the year. The contraction marked the biggest decline since the 7.6 percent drop in the second quarter of 2003.
Singapore suffered from slower exports of drugs and electronics in the fourth quarter, and while services and construction remained healthy, manufacturers may be vulnerable to softer external demand this year.
Manufacturing output rose just 0.5 percent from a year earlier in the fourth quarter after growing 10.3 percent the previous three months. The sector expanded 5.6 percent for the full year in 2007. Construction output rose 24.4 percent compared to the same quarter a year ago, accelerating from 19.2 percent growth in the third quarter.
Singapore's services sector was also a key growth driver in the fourth quarter, led by financial institutions and a healthy tourism industry. The services sector grew 8.3 percent on year in the fourth quarter, matching the pace of the previous three months. For the full year, services expanded 8.1 percent.
Gross domestic product rose 6.0 percent from a year earlier, less than the 9.0 percent rise posted in the third quarter and coming in short of a poll forecast for 7.8 percent growth. For the full year, Singapore's economy grew 7.5 percent in 2007, less than the 7.9 percent rise posted in 2006.
The downturn in the fourth quarter could cause a dilemma for the island's central bank as the risk of an economic slump precludes monetary tightening even as the island faces the highest inflation since the early 1980s.
Singapore's central bank uses foreign exchange rather than interest rates to control prices because external trade dwarfs the domestic economy. Last October it said it would let the Singapore dollar appreciate at a faster pace to cap surging costs of imported food and energy. The consumer price index -- a non-core measure of costs for goods and services -- rose 4.2 percent from a year earlier in November, the fastest pace since May 1982.
Singapore's Private Home Prices Rise Despite Slower 4Q Growth
Singapore's private home prices rose almost a third over the whole of 2007 despite a slower pace of growth in the fourth quarter, the government said Wednesday. For the year, the housing price index rose 31 percent. Fourth-quarter private property prices rose 6.6 percent from the third quarter after increasing 8.3 percent in the previous three months, according to preliminary estimates from the Urban Redevelopment Authority.
No average price figures were released. Homes in the central region sold for record prices last year, and the property price inflation has also spread to less-expensive suburban areas. Prices in the core central region rose 7 percent in the quarter from the previous period, compared to the 8.3 percent increase in the previous three months.
Just outside the core central region, prices increased 7.3 percent, slightly slower than the 7.9 percent rise in July-September. Elsewhere home prices rose 7.5 percent, also slightly slower than growth of 7.9 percent in the previous quarter.
During the fourth quarter, the government withdrew a scheme that allowed buyers of uncompleted properties to defer part of the payments in a bid to slow the sector. The scheme had been implemented in 1997 when Singapore's property market crashed. It fueled speculation among investors who secured properties with minimum downpayments and quickly resold them.
About 85 percent of Singaporeans live in subsidized public housing apartments built by the government. Private developers compete to provide housing for the remaining 15 percent of Singapore citizens, along with a sizable number of foreigners that make up the rest of the city-state's population of about 4.5 million. The flash estimate issued Wednesday on home prices is based on data for the first 10 weeks of the quarter. The government will issue more detailed figures in one month.
Singapore's economy contracted the first time in more than four years in the fourth quarter as weakness in manufacturing outweighed windfall growth from a construction boom, the government said Wednesday.
Singapore's economy shrank 3.2 percent from the third quarter on a seasonally adjusted annualized basis, the Ministry of Trade and Industry's advance estimate showed. It expanded 4.4 percent in the July-September quarter compared to the second.
A Dow Jones Newswires poll of economists had forecast a 4.2 percent rise in the final quarter of the year. The contraction marked the biggest decline since the 7.6 percent drop in the second quarter of 2003.
Singapore suffered from slower exports of drugs and electronics in the fourth quarter, and while services and construction remained healthy, manufacturers may be vulnerable to softer external demand this year.
Manufacturing output rose just 0.5 percent from a year earlier in the fourth quarter after growing 10.3 percent the previous three months. The sector expanded 5.6 percent for the full year in 2007. Construction output rose 24.4 percent compared to the same quarter a year ago, accelerating from 19.2 percent growth in the third quarter.
Singapore's services sector was also a key growth driver in the fourth quarter, led by financial institutions and a healthy tourism industry. The services sector grew 8.3 percent on year in the fourth quarter, matching the pace of the previous three months. For the full year, services expanded 8.1 percent.
Gross domestic product rose 6.0 percent from a year earlier, less than the 9.0 percent rise posted in the third quarter and coming in short of a poll forecast for 7.8 percent growth. For the full year, Singapore's economy grew 7.5 percent in 2007, less than the 7.9 percent rise posted in 2006.
The downturn in the fourth quarter could cause a dilemma for the island's central bank as the risk of an economic slump precludes monetary tightening even as the island faces the highest inflation since the early 1980s.
Singapore's central bank uses foreign exchange rather than interest rates to control prices because external trade dwarfs the domestic economy. Last October it said it would let the Singapore dollar appreciate at a faster pace to cap surging costs of imported food and energy. The consumer price index -- a non-core measure of costs for goods and services -- rose 4.2 percent from a year earlier in November, the fastest pace since May 1982.
Singapore's Private Home Prices Rise Despite Slower 4Q Growth
Singapore's private home prices rose almost a third over the whole of 2007 despite a slower pace of growth in the fourth quarter, the government said Wednesday. For the year, the housing price index rose 31 percent. Fourth-quarter private property prices rose 6.6 percent from the third quarter after increasing 8.3 percent in the previous three months, according to preliminary estimates from the Urban Redevelopment Authority.
No average price figures were released. Homes in the central region sold for record prices last year, and the property price inflation has also spread to less-expensive suburban areas. Prices in the core central region rose 7 percent in the quarter from the previous period, compared to the 8.3 percent increase in the previous three months.
Just outside the core central region, prices increased 7.3 percent, slightly slower than the 7.9 percent rise in July-September. Elsewhere home prices rose 7.5 percent, also slightly slower than growth of 7.9 percent in the previous quarter.
During the fourth quarter, the government withdrew a scheme that allowed buyers of uncompleted properties to defer part of the payments in a bid to slow the sector. The scheme had been implemented in 1997 when Singapore's property market crashed. It fueled speculation among investors who secured properties with minimum downpayments and quickly resold them.
About 85 percent of Singaporeans live in subsidized public housing apartments built by the government. Private developers compete to provide housing for the remaining 15 percent of Singapore citizens, along with a sizable number of foreigners that make up the rest of the city-state's population of about 4.5 million. The flash estimate issued Wednesday on home prices is based on data for the first 10 weeks of the quarter. The government will issue more detailed figures in one month.
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