Last quarter's strong showing, which eclipsed initial estimates of 6.0 percent, was underpinned by robust growth in the manufacturing and service sectors, the ministry of trade and industry (MTI) said.

The September quarter's growth acceleration was the economy's best showing in four quarters and well ahead of the second quarter's 5.4 percent.

On a quarter-on-quarter basis, gross domestic product (GDP) grew 7.1 percent, after the previous gain of 19 percent.

"Growth momentum was strong with the economy expanding by 7.1 percent on a quarter-to-quarter basis," Cheang Kok Chung, the ministry's director for economics and strategy, said at a media briefing.

"So on account of the strong momentum recorded in the second and third quarters and the favorable outlook in the remaining months of the year, MTI has raised the growth forecast for 2005 to around 5.0 percent," he said.

The government had previously estimated full-year Gross Domestic Product (GDP) growth at 3.5-4.5 percent.

Growth has averaged above five percent in the three quarters of 2005. For 2006, the economy is projected to grow three to five percent.

"This resurgence, led by manufacturing, financial services and entrepot trade, mirrored the improvement in the global economy," the ministry said.

"This favourable growth trend looks likely to be sustained in the remaining months of the year."

Despite the rosy outlook, the government warned of existing risks that could derail the trade-led economy. These included rising global interest rates and widespread worries of a bird flu pandemic.

During the September quarter, the key manufacturing sector was the star performer with year-on-year growth of 13.2 percent and a quarterly expansion of almost 27 percent, the fastest of any in the economy.

The sector's sizzling performance was led by a 62 percent increase in biomedical output, which provided an important buffer for the moderate 2.9 percent growth in electronics production, the ministry said.

Other sectors also registered growth in the September quarter with the construction sector's 0.5 percent expansion especially encouraging after contracting in the first two quarters of 2005.

Analysts said the government's revision of the 2005 growth target was not surprising as the economy had shown its resilience in the face of high oil prices.

"It shows that the economy is definitely resilient, that all engines are really firing up ... even construction has turned the corner," said Leslie Tang, an economist with UOB Kay Hian brokerage.

"The market is already expecting above five percent (growth for the economy this year)," Tang said, adding that he had upped his target for this year to 5.2 percent from 5.0 percent.

Other data released Thursday confirmed the economy is doing well, with Singapore's key non-oil domestic exports (NODX) up 9.8 percent in October, coming in well above forecasts on the back of stronger electronics orders.

The rise in NODX, valued at 13.1 billion Singapore dollars (7.7 billion , was well ahead of analyst forecasts for 2.0-7.8 percent year-on-year growth.

Total trade in October rose 20.3 percent to 62.8 billion dollars.

Electronics, which accounted for more than half of NODX, increased 8.5 percent to almost 7.0 billion dollars in October compared with just a 1.7 percent rise in September.

                                                      Home