The Singapore economy is likely to grow 3.5 to 4 per cent this year, higher than the 2.5 to 3.5 per cent previously estimated, said the Ministry of Trade and Industry on Thursday.
This is partly due to a better-than-expected performance in the July to September quarter, when the economy grew 5.8 per cent, the ministry revealed. The third-quarter growth beat initial estimates of 5.1 per cent growth and was higher than the 4.4 per cent growth in the preceding quarter.
The ministry also announced next year's growth forecast for the first time. It expects Singapore's economy to grow by 2 to 4 per cent for 2014.
"The global economic outlook is expected to continue to improve modestly in 2014, supported by a slow recovery in the US and eurozone," it said in a statement.
"Externally-oriented sectors such as manufacturing and transportation & storage are likely to continue to provide support to growth, in tandem with the recovery in global demand. However, some labour-intensive domestically-oriented sectors may see their growth weighed down by tightness in labour market conditions."
Singapore's economic growth in the third quarter was boosted by a strong recovery in manufacturing. The sector expanded 5.5 per cent over the same period last year, up from just 1.3 per cent growth in the second quarter.
This was due to a better showing in the electronics segment and a sharp rebound in transport engineering output, the ministry said.
The services sector also continued to grow strongly in the third quarter, with a 6.3 per cent expansion.. Wholesale and retail trade grew 7.9 per cent over last year, on the back of stronger trade flows to advanced economies and Greater China.
But growth in the finance and insurance services segment eased to 10.5 per cent from 13.7 per cent in the second quarter, due to less expansion in the sentiment-sensitive cluster.
Growth in the construction sector came in at 5.3 per cent, down from 6.9 per cent in the preceding quarter. This was due to slower growth in public non-residential building works.