SINGAPORE, Jan. 2 (Xinhua) -- Singapore's economy, out of market expectation, grew 1.8 percent on quarter in the fourth quarter of 2012, an upturn from the contraction of 6.3 percent in the preceding quarter, the city-state's Ministry of Trade and Industry said Wednesday.
After Prime Minister Lee Hsien Loong said in his new year message on Monday that the economy expanded 1.2 percent on year in 2012, a lot of analysts had talked that in Q4 it would go into technical recession, which is defined as two consecutive quarters of quarter-on-quarter contraction.
Meanwhile, the city-state's weak purchasing managers' index during the latest five months until November, the recent external trade performance together with manufacturing output data all showed sign of weakness.
However, it avoided technical recession again as sharp downward revisions were made to the GDP estimate of Q3 for 2012, from the 1. 5 percent contraction estimated in October to 6.3 percent contraction today, said CIMB Research.
The changes made to GDP of Q2 for 2012 were more moderate - down from 0.5 percent expansion quarter-on-quarter to 0.2 percent, it added.
"With revised data showing weaker growth in prior quarters, the economy expanded a better-than-expected 1.8 percent quarter-on- quarter Seasonally Adjusted Annual Rate (SAAR) in Q4 of 2012. This means Singapore has averted a technical recession yet again," said Song Seng Wun, an economist of CIMB.
"We maintain our 2013 growth forecast of 2.7 percent, expecting the MAS to maintain its policy of a modest and gradual appreciation of the trade-weight Singapore dollar in April, citing inflationary concerns," he added.
On a year-on-year basis, Singapore's economy grew 1.1 percent in the fourth quarter of 2012, while the growth for the whole year was estimated at 1.2 percent, the ministry said.
The government has previously expected the economy to grow by around 1.5 percent for the whole year of 2012, which represented a downward revision from the official forecast of 1.5-2.5 percent announced earlier. The official forecast used to be 1-3 percent at the beginning of the year.
In particular sectors, the manufacturing sector contracted by 1. 5 percent on year in the fourth quarter, following the 1.6 percent decline in the preceding quarter. On quarter-on-quarter basis, this sector contracted by an annualised rate of 10.8 percent, extending the 9.9 percent decline in the previous quarter.
"This largely reflected the continued weakness in the output of the electronics cluster," the ministry added in a statement.
The construction sector grew by 5.9 percent annually in Q4, lower than the 7.7 percent growth in Q3. However, on a quarter-on- quarter basis, the sector contracted by an annualised rate of 8.9 percent, mainly due to the decline in private sector building activities.