Diversified S'pore economy to do well: economist

Business Times - 15 May 2008


Diversified S'pore economy to do well: economist

By QUAH CHIN CHIN

THE Singapore economy has held up well despite slower exports in the past 18 months, an economist said yesterday.

HSBC senior economist Robert Prior-Wandesforde said that tech exports in particular have been contracting, but this has not drastically affected the economy.

'What we've seen over the past 18 months is something unprecedented,' he said. 'At the same time that the electronics sector has been under pressure, Singapore's gross domestic product growth has held up remarkably well.

'If we had known how electronics exports were going to be, we might have thought GDP would be growing at, say, 2 to 3 per cent at the moment. But it's not. It grew 7.2 per cent in the first quarter.'

This indicates that the economy has decoupled from the electronics sector and diversified into other areas, 'many of which are not correlated with the US or the developed world's economic cycle', Mr Prior Wandesforde said.

These include marine and offshore engineering and pharmaceuticals, which have doubled and grown 85 per cent respectively in the past four years.

Speaking yesterday at International Enterprise Singapore's open house, Mr Prior-Wandesforde said that 'older industries' such as financial services and construction have been reborn.

'In the financial industry, for example, we've seen a heavy push into wealth management, which is structurally a huge growth area, going forward,' he said.

'So clearly, structurally, Singapore has changed massively. It has diversified away from some of the traditional sources of growth.'

He believes that the economy 'will do pretty well' regardless of any 'global storm', and predicts 6 per cent GDP growth this year.

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