Singapore economy seen to grow 7% in 2011

Services sector will be the key driver of growth as well as job creation.

DBS said the sector will contribute 5.3% pt to overall GDP growth and generates about 3/4 of the total job creation of 140,000 this year.

Essentially, rising regional consumerism should bolster tourism related and retail services while increased intra regional trade is expected to drive the trading and transportation services.

In addition, strong global capital flows into the financial system and the rise in regional wealth should imply a robust performance by the financial sector this year. Separately, fallout in the manufacturing growth is unlikely and possible capacity expansion in the pharmaceutical segment could still spring upside surprises. Though the moderation in global electronics demand will depress production in the electronics sector, a stronger than expected recovery in the US could provide some surprise in the manufacturing sector particularly in the second half of the year.

Growth momentum in the construction sector will continur to moderate due to completion of the mega projects, property cooling measures as well as increase in foreign worker levies. But a slew of public transportation projects should at least provide some support to the sector going forward.