Singapore’s economy grew by 9.1 per cent in the first quarter from a year ago, but there were signs that expansion was slowing, according to the government’s preliminary “flash” estimate.

The economy grew by 1.2 per cent on a seasonally adjusted, annualised rate from the fourth quarter of last year, below market forecasts.

However, economists said that while the latest quarter-on-quarter rate might give the impression of slower growth, it should also be measured against the fact that growth in the last three quarters of 2005 was very strong. In the fourth quarter, the economy expanded by an annualised 12.5 per cent.

“The best way to gauge these quarter-on-quarter figures is to average two quarters’ growth to avoid misleading volatility. On this basis, the economy has growth momementum of about 7 per cent, which feels about right,” said Adrian Foster at Dresdner Kleinwort Wasserstein.

Singapore’s growth rate can fluctuate sharply because the manufacturing sector mainly consists of electronics and pharmaceuticals, with the later subject to volatile demand.

ING said the preliminary estimate for the first quarter, which reflects data for January and February, represented the fastest year-on-year growth rate in the last seven quarters, with the economy set to achieve the government’s 2006 forecast of 4-6 per cent growth.

Many private economists expect the 2006 growth rate could exceed the government target, with predictions that the first-quarter results will be revised upward when final data is released in May.

The government said the manufacturing sector grew by 16 per cent from a year ago, “underpinned largely by strong growth in the electronics, biomedical and transport engineering sectors,” including oil rigs.

Singapore is the world’s largest oil rig producer and it has received increased orders in the sector due to rising oil prices.

Services, which make up more than 60 per cent of the economy, expanded by 7.6 per cent, but construction contracted by 0.6 percent.

Expectations of robust full-year growth is likely to persuade the Monetary Authority of Singapore, the central bank, to decide on Tuesday to tighten monetary policy in an effort to curb inflationary pressure caused by higher oil prices and a tight labour market.

MAS determines interest rate policy by adjusting the Singapore dollar against a basket of currencies. Most analysts predict that MAS will allow the currency to appreciate slightly when it releases the twice-yearly policy review.

MAS has maintained a policy of “gradual and modest appreciation” in the currency since April 2004.

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