Singapore GDP growth and energy intensity

The Ministry of Trade and Industry has released the Singapore economy's third quarter performance.

Growth of the Singapore economy eased to 7.2 per cent in the third quarter, following an 8.2 per cent gain in the preceding quarter. Growth momentum (on an annualised quarter-on-quarter basis) rose to 5.7 per cent, up from 3.9 per cent in the second quarter.

Year-on-year growth was boosted by a 23.4 percent surge in government expenditure and a 10.3 percent jump in gross fixed capital formation. Growth in private consumption expenditure was less impressive at 2.2 percent, while the external sector continues to be an important source of growth, exports and imports growing by 10.3 percent and 10.9 percent respectively and helping manufacturing grow 10.6 percent.

All figures are in real terms.

The Ministry appears sanguine about the outlook.

Overall, the economic outlook remains benign. But there are several downside risks. First, a sharp correction in the US housing market could have knock-on repercussions on the US economy and rest of the world. Second, inventory adjustments in the semiconductor industry could pose a drag on the electronics industry. Third, although oil prices have retreated from the record levels in July, they remain high and vulnerable to supply shocks. Other risks include the huge global imbalances, Avian flu pandemic
and terrorism.

Taking into account the above factors, the Ministry of Trade and Industry has revised the 2006 economic growth forecast from 6.5 – 7.5 per cent to 7.5 – 8.0 per cent. Economic growth in 2007 is expected to be 4.0 – 6.0 per cent.

There was also a feature article on the energy intensity of the Singapore economy. The conclusion:

After accounting for marine bunkers, Singapore’s energy intensity is roughly on par with countries of the same level of development. Compared to less energy intensive economies, Singapore’s higher energy intensity is due mostly to the use of energy in the manufacturing sector, the consumption of fuels as feedstock in the petrochemicals industry and the sale of jet fuel to the international civil aviation sector.