SINGAPORE - Singapore's economy will likely grow at a slightly faster pace this year than expected earlier, helped by a pick-up in manufacturing and financial services, a central bank survey released on Wednesday showed.
Singapore, a wealthy city-state of 5.3 million people, twice came close to falling into recession last year as global demand for electronics plunged and weak financial markets took a toil on investment banks.
The electronics industry has shown signs of stabilising, however, with a key semiconductor industry gauge turning positive in January and US retail sales expanding at their fastest clip in five months in February.
Economists now expect Singapore's gross domestic product (GDP) to grow 2.8 per cent this year, slightly higher than the median estimate of 2.7 per cent in the previous poll, according to the Monetary Authority of Singapore's (MAS) latest quarterly Survey of Professional Forecasters.
The bulk of growth is likely to come in the second half of the year, however, with economists forecasting 0.8 per cent year-on-year growth for the first three months of 2013.
Singapore's economy expanded by 1.3 per cent last year, hurt by tepid growth in manufacturing and financial services of just 0.1 per cent and 0.5 per cent, respectively.
For 2013, the median estimate of economists is for manufacturing to expand by 3.3 per cent and financial services to grow by 3.0 per cent.
Manufacturing contributes to around 20 per cent of Singapore's GDP while financial services account for about 12 per cent.
Meanwhile, inflation is likely to dip to 3.8 per cent this year, unchanged from the previous survey, but down from 2012's 4.6 per cent.
MAS conducts its survey every quarter after the release of economic data for the preceding three-month period.
The median forecasts in the latest report were based on the estimates of 21 economists.
Singapore's official forecasts are for growth of 1-3 per cent this year and inflation of 3.5 to 4.5 per cent.
Most economists expect Singapore will face several years of slow growth and relatively high inflation as the government reins in immigration amid a backlash from locals unhappy about crowded trains and competition for jobs that has depressed wages at the lower end.
To help keep inflation in check, MAS is likely to persist with its policy of letting the Singapore dollar rise against the currencies of its main trading partners.
According to the MAS survey, the Singapore dollar is likely to end the year at 1.200 to the dollar, strengthening from current levels of around 1.250.