Singapore economy seen growing 5.5 pct in 2010

By ALEX KENNEDY

Associated Press Writer

updated 4:47 a.m. ET Dec. 9, 2009

SINGAPORE - Singapore's economy will rebound from recession next year as improving global demand for the city-state's exports fuels a pickup in manufacturing, according to a central bank survey of analysts.

The country's gross domestic product will likely grow 5.5 percent next year, according to the median forecast of 20 economists in the quarterly survey, the Monetary Authority of Singapore said Wednesday.

In the previous survey in September, analysts had expected the economy would grow 4.5 percent next year. The analysts also raised their forecasts for this year, now expecting a contraction of 2.0 percent compared to a 3.6 percent contraction in the September survey.

Singapore, which relies on trade, finance and tourism to sustain one of Asia's highest living standards, was hard hit by the global economic downturn. GDP will likely reach its pre-recession level in the second quarter of next year — eight quarters after the recession began — while it has usually taken the economy about six quarters to fully recover from earlier slumps.

The economy expanded an annualized 14 percent in the July-September period, a second consecutive quarter of double-digit growth after a year of contraction. The government expects the economy will shrink between 2 percent and 2.5 percent this year and grow between 3 percent and 5 percent next year.

The forecast economic growth for next year, while an improvement over this year, is still below Singapore's potential, said Kit Wei Zheng, an economist with Citigroup in Singapore.

Growth of 5.5 percent "is not a particularly strong recovery, especially when you compare it with past recoveries," said Kit, who expects 6.5 percent growth next year.

Analysts said the economy is likely to grow 4.7 percent in the fourth quarter from a year earlier, more than their prediction in September of a 1.9 percent expansion, the central bank said.

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