Singapore Economic Growth to Slowdown in 07

Singapore Economic Growth to Ease in '07

SINGAPORE (AP) - Singapore's economy will likely decelerate in 2007, but analysts expect modestly slower growth in the electronics industry with overall expansion at the center of the government's target range.

"We expect the electronics slowdown to be quite modest with some sectors remaining supportive of overall growth," said Selena Ling, a strategist at OCBC Bank.

The Monetary Authority of Singapore's quarterly survey, issued Thursday, shows that economists expect the economy to expand by 5.2 percent in 2007, a slightly faster pace than the 5.1 percent forecast in September.

The survey follows a recent government forecast for economic growth between 4 percent and 6 percent in 2007, and indicates that weaker demand for Singapore's electronics exports may have a limited impact on overall expansion.

The government recently highlighted the semiconductor industry as a key source of potential slowdown.

But OCBC's Ling said that the chip sector will be balanced by robust demand for other products, like gaming consoles and music players.

"The North American semiconductor book-to-bill ratio has dipped below one, but consumer electronics products should still fare well," Ling said. "We should still see support from the electronics sector."

The survey forecasts the island republic's non-oil domestic exports to grow by 9 percent in 2007.

In 2006, the survey predicts that non-oil exports will increase by 11.0 percent, slower than the 13.2 percent projected in September.

David Cohen, an analyst at Action Economics said that the lower export forecasts reflect the most recent round of economic data.

"It's just incorporating the latest data like export figures from the start of the (fourth) quarter," Cohen said.

Non-oil exports expanded 3.8 percent from a year earlier in October to a total of 14.80 billion Singapore dollars, compared with 8.2 percent growth in September.

Electronics exports, which represent about half of all non-oil exports, contracted by 2.6 percent from a year earlier in October.

Economists also increased their 2006 growth forecast to 7.8 percent from 7.1 percent last quarter, which is within the government's recently revised target range of 7.5 percent to 8.0 percent.

© 2006 The Associated Press.