Singapore Economy

Economy: Singapore GDP expanded in 4Q12 at a faster pace than earlier estimates had shown, bouncing back more strongly from a contraction in 3Q. GDP grew 3.3% on an annualized, seasonally adjusted basis, besting consensus estimates of 1.8% qoq growth and compares to a 4.6% qoq contraction in 3Q. 4Q GDP growth by sector (annualized Q/a SA): * Manufacturing +3.1% * Construction -3.9% * Financial services -1.3% * Business services +2.1% The better-than-forecast result allowed the Ministry of Trade and Industry, to raise its FY12 growth estimate to 1.3%, from 1.2% estimated previously. Yoy, 4Q12 GDP grew 1.5%, versus the earlier estimate of 1.1%. The ministry maintained its forecast for 2013 of GDP growth of between 1.0% and 3.0%. BOA-ML notes, recoveries in China and the U.S. have improved the outlook for the region, with economies from Malaysia to Thailand reporting faster GDP growth for last quarter. Thinks, the MAS, which allowed faster currency gains in 2012 to curb price increases, may maintain its appreciation policy at its Apr meeting as Spore grapples with persistent inflation pressures. Separately, Finance Minister Tharman Shanmugaratnam will present the nation’s annual budget to Parliament on Feb. 25 where he may announce more measures to reduce the country’s reliance on overseas labor while providing incentives to businesses to boost productivity.