2011 full year GDP growth may have been 5%

And DBS expects growth in 4Q11 to be 4.2% YoY.

According to DBS, on a sequential basis, it implies a contraction of 2.5% QoQ saar, compared to the advance figure of - 4.9%.

Here’s more from DBS:

Final GDP figures for 4Q11 will be on tap tomorrow morning. An upward revision in the headline GDP growth figures for 4Q11 is on the cards. Barring any significant downside risk to the services growth figures, headline growth number for 4Q11 could be revised up to 4.2% YoY, from the advance GDP estimates of 3.6%.

On a sequential basis, it implies a contraction of 2.5% QoQ saar, compared to the advance figure of - 4.9%. That is, the pullback in GDP growth in the fourth quarter of last year has been less severe than what many had earlier predicted. And assuming that there is no further revision to the GDP growth figures for the past three quarters, full year GDP growth for 2011 should come in at about 5.0%, rather that the projected 4.8% indicated in the advance estimates.

Essentially, the main driver for upward revision in GDP came from the manufacturing sector, specially the biomedical segment. Export sales for pharmaceutical product were up by 38.6% YoY or about 27% MoM sa in Dec11. This has led to a 121% YoY jump in pharma production output and contributed significantly to the overall expansion of the manufacturing sector.

Industrial production index was up by a solid 12.6% YoY (7.8% MoM sa). What this implies is that the manufacturing sector is now expected to grow by 9.0% in 4Q11 against the advance estimate of just 6.5%. Separately, headline growth figures for the services and construction sectors are likely to come in at 3.2% and 1.7% respectively, in line with the advance projection.

Plainly, the much anticipated jolt in growth momentum in the last quarter has been softer than expected despite the drag from Europe. But it should be noted that it is mainly driven by the strong rebound from pharmaceutical production. Ex-biomedical output fell by 9% YoY in the month. The boost from the pharmaceutical segment has masked the downside risks facing the manufacturing sector.

While the drug sector can grow by leaps and bounds, the rest of the manufacturing sector is in a slump. Demand from the developed economies has been sluggish while Asia is also cooling. As long as global uncertainties continue to linger, small and open economies such as Singapore will be most affected.

Moreover, with the Lunar New Year effect coming into place in January, there could be more downside to exbiomedical output. The upcoming NODX figure for Jan will be telling. We expect the headline number to moderate to 4.8% YoY, down from 9.0% in the previous month.