PRLog (Press Release) – Apr 01, 2011 – Singapore's economy will perform well this year, despite easing back on the exceptionally strong showing achieved in 2010. Some form of cooling off had been on the cards for 2011 given the expected slowdown in the global economy, but BMI's view remains quite bullish. The US and Chinese economies - important drivers of growth in Singapore - will play a more positive role than we had earlier expected. At the end of last year we raised our forecast for GDP growth in the US; in China on the other hand, it is possible that the Beijing authorities will tighten monetary policy less than expected, meaning that growth there too could end up being stronger than originally projected. So the picture for Singapore points to fairly vigorous manufacturing and services growth, continuing high employment, and a positive contribution by net exports to GDP, albeit much less so than in 2010. BMI forecasts 2011 GDP growth of 5% in Singapore (following on from the spectacular 15% achieved in 2010 when the country was recovering vigorously from the global recession in the preceding year). The economy will then ease off a little to 3.9% growth in 2012. In the five years to 2015 we expect growth to average 4.3% per annum.
Headline Industry Data
* Port of Singapore box handling set to grow 11.8% this year to reach 31.752mn 20-foot equivalent units (TEUs). In 2010 Singapore handled 28.4mn TEUs, making it the world's second busiest container terminal after Shanghai.
* ?? Singapore's gross tonnage will rise by 9.2% to 548.597mn tonnes, a very strong year; both box handling and gross tonnage will expand faster than the overall economy, which BMI predicts to grow by 5% in 2011.
* The country's overall trade will grow by a healthy 6.1% in real terms this year.
Key Industry Trends
Singapore Down Into The Number-Two Slot. Shanghai, benefiting from China's strong growth and the World Expo trade fair, took over the number one position in 2010, handling 29.05mn TEUS. Singapore saw growth of 9.6% to 28.4mn TEUs. Singapore remains the world's number-one bunkering port.
APL Boasts Intra-Asia Exposure- APL is a Singapore-based subsidiary of Neptune Orient Lines (NOL). The new China Indonesia Straits Service (CISS) is being operated by four 3,000TEU container ships, and is designed to serve the growing need for direct-call service to key Asian growth markets.
Key Risks To Outlook
Singapore is likely to hold general elections during the course of this year (they must by law be called before February 2012) and with some signs of a property price 'bubble', it is possible that there could be an economic hard landing in 2012, representing a downside risk to our forecasts. BMI, however, believes this is very unlikely. The country remains politically very stable with the ruling Peoples' Action Party (PAP) expected to retain its large majority, and the government has been working very hard since the recession of 2009 to curb property price inflation. In January 2011 it introduced its fourth package of property price curbs, including increased stamp duties and a lower loan-to-value limit.
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