SINGAPORE - Singapore's economy grew much faster than initially estimated in the second quarter and more than analysts had expected, helped by expansions in the services sector and manufacturing.
The city-state's economy grew 2.2 per cent in April-June from the previous three months on an annualised and seasonally adjusted basis, the Ministry of Trade and Industry (MTI) said in a statement on Friday.
That compared with the government's advance estimate last month of 0.4 per cent growth, which economists had expected to only pick up marginally to 0.5 per cent in the final print.
Singapore and other trade-reliant Asian economies have gained a boost this year from an improvement in global demand, particularly for electronics products and components such as semiconductors.
The latest GDP data also contained signs that Singapore's economic growth is better balanced than first thought, with strength seen in other sectors which had been considered more sluggish. Services producing industries grew 3.3 per cent from the previous quarter.
"For the second half of this year, we should see services momentum improving in line with the greater confidence about global growth prospects and domestic sentiments," said Selena Ling, head of research and strategy for OCBC Bank.
"On one hand we are seeing the services side improve. But that said, manufacturing may take a little bit of a breather once we get to the fourth quarter because of the high base last year," Ling added.
The MTI said its central view is that GDP growth for the whole of 2017 will come in at around 2.5 per cent, and revised its official full-year growth forecast to a range of 2.0 to 3.0 per cent from 1.0 to 2.0 per cent previously.
Prime Minister Lee Hsien Loong had said earlier this week that he expected Singapore's economy to grow around 2.5 per cent in 2017.
Gross domestic product expanded 2.9 per cent in the second quarter from a year earlier. The government's advance estimate was growth of 2.5 per cent, while economists polled by Reuters had expected 2.6 per cent growth.
Given lingering global risks such as a possible flare-up in trade protectionism, the central bank has been seen as being in no hurry to tighten its exchange-rate based monetary policy.
The MAS kept policy unchanged at its last policy decision in April, saying a "neutral" stance is appropriate for an extended period.