By ALEX KENNEDY,Associated Press Writer
SINGAPORE - Singapore's economy grew for the first time in a year, soaring 20 percent in the second quarter, a sign Asia is emerging from the global slump.
Gross domestic product jumped an annualized, seasonally adjusted 20.4 percent in the three months through June from the previous quarter, the Trade and Industry Ministry said Tuesday in a statement. It said GDP fell 3.7 percent from year earlier after a 9.6 percent drop in the first quarter.
The ministry now expects the Southeast Asian city-state's economy to shrink between 4 percent and 6 percent this year, better than its previous forecast of a contraction between 6 percent and 9 percent.
"The Singapore economy is back and back with a vengeance," said Robert Prior-Wandesforde, senior Asia economist for HSBC in Singapore. "We very much doubt that today's Singapore GDP release will be the last in Asia to provide a sizable upside surprise."
The island's economy _ which relies on exports, finance and tourism _ had contracted the previous four quarters as it reeled from a collapse in global trade triggered by the financial crisis. An annualized 16.4 percent drop in the October-December period was the nadir of its deepest recession since splitting from Malaysia in 1965.
Singapore is the first major Asia economy to report second quarter GDP results. The second quarter GDP estimate was calculated using data largely from April and May and is subject to revision.
The ministry revised its first quarter economic figures to an annualized contraction of 12.7 percent from its initial estimate in April of a 19.7 percent contraction.
A surge in pharmaceutical production helped boost growth in the second quarter. Manufacturing fell 1.5 percent from a year ago compared to a 24 percent contraction in the first quarter. Construction rose 18 percent in the second quarter while services dropped 5.1 percent.
The ministry warned that the rebound in manufacturing could wane over the rest of the year.
"A sizable part of Singapore's manufacturing uptick came from a spike in biomedical manufacturing output and electronics inventory restocking, both of which may not be sustained," the ministry said.
Demand for exports from the U.S., Europe and Japan remains weak, but Singapore's sales to Indonesia, Malaysia and China have picked up, said Irvin Seah, an economist with DBS bank in Singapore.
"The main driver for this recovery has been our exports to the region," Seah said. "We're seeing strong demand from Asia, especially China."
"Asia is showing signs that it is able to drive its own demand, which is a good sign for the region's growth."