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Singapore economy grows 1.3 percent in 2012

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(Globalpost/GlobalPost)

Growth in Singapore's trade-reliant economy slowed down sharply last year, expanding 1.3 percent as exports tumbled due to a global economic slump, official data showed Friday.

Although full-year growth was marginally higher than the 1.2 percent figure given by Prime Minister Lee Hsien Loong last month based on preliminary data, it still marked a steep deceleration from the 5.2 percent expansion in 2011.

The key manufacturing sector bore the brunt of the slowdown, as global demand for electronics goods softened.

"For the whole of 2012, Singapore's GDP (gross domestic product) growth slowed to 1.3 per cent, from 5.2 per cent in 2011, mainly due to weakness in the externally-oriented sectors," the trade ministry said in a statement.

"Weighed down by the contraction in the electronics cluster, (the) manufacturing sector growth slowed sharply from 7.8 percent in the previous year to 0.1 percent."

Electronics shrank by 11.3 percent in 2012, faring the worst out of Singapore's six major manufacturing clusters.

Overall GDP was supported by a buoyant construction sector which grew 8.2 percent last year, the ministry said. Services rose 1.2 per cent.

For the fourth quarter of 2012, GDP expanded a better-than-expected 1.5 percent year on year.

The ministry maintained its 2013 growth forecast at 1.0-3.0 percent in light of economic worries in Europe and the US.

"While downside risks have receded, the global economic outlook is still clouded with uncertainties," the ministry said.

"In particular, concerns remain over the extent of the fiscal cutback with the budget sequester in the US, as well as the potential flare-up of the debt crisis in the eurozone.

"Should any of these risks materialise, Singapore's economic growth could come in lower than expected."

Singapore's trade-dependent economy is considered a bellwether for Asia's exporters, which depend heavily on electronics and other manufactured shipments to the West as economic drivers.

But unlike its bigger neighbours, the city-state lacks a domestic market to make up for the slack in exports.

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http://www.globalpost.com/dispatch/news/afp/130222/singapore-economy-grows-13-percent-2012