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Singapore Adjusts Growth Forecast For This Year, Electronics Sector Attracts Highest Investments

From 1.0 to 3.0 percent, Singapore’s growth forecast for the whole year of 2012 was adjusted and narrowed down to 1.5 percent to 2.5 percent by the Ministry of Trade and Industry (MTI). This came in the wake of modest gains in the Gross Domestic Product (GDP) for the second quarter of this year.

This quarter’s GDP grew by 2.0 percent compared to the same period a year ago, but on a quarter-on-quarter seasonally adjusted annualised basis, the economy had contracted by 0.7 percent. This was in the heels of a 9.5 percent growth in the previous quarter.

The MTI pinpointed on stunted growth in externally-oriented sectors, such as wholesale trade, tourism, and electronics manufacturing as instrumental in the slow growth.

Furthermore, the economic outlook of the city state for the year 2012 is expected to remain subdued in the remaining half of the year, according to the MTI.

The MTI vowed, however, that domestic demand in emerging Asia would still be supported by accommodative policies. It also said that the Singapore government would still extend support for the growth of the transport engineering sector as well as the construction sector, which registered the highest growth in the second quarter.

Still from the Economic Survey of Singapore for the second quarter, investment commitments in total fixed asset investments or FAI totaled $4.6 billion, as well as $2.1 billion for the total business spending less depreciation or TBS.

The electronics sector registered the most fixed asset investments at $2.8 billion, covering mainly semiconductors, as well as the most TBS commitments at $777 million. The chemicals cluster followed with $0.9 billion FAI, while the transport engineering sector had $343 million in TBS commitments. These commitments are expected to generate about 5,800 additional skilled jobs, as well as $10.3 billion.