Firm Growth To Support Assets

Singapore's Straits Times Index (STI) and its dollar currency should be boosted by improving economic growth going forward. Real GDP expanded by a seasonally-adjusted annualised rate of 18.0% in Q205 (5.2% y-o-y), easily surpassing the government's forecast of a 12.3% increase. Significantly, the economy rebounded sharply from a 4.6% annualised contraction in Q105, as manufacturing surged by 36.3% (5.9% y-o-y) and wholesale and retail output by 25.3% (8.3% y-o-y). The government improved its 2005 economic growth target to 3.5-4.5%, from 2.5-4.5% previously. BMI forecasts expansion of 3.8% this year. This would be well below the impressive 8.4% increase in 2004,

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