GDP may have increased 6.6% in 2010

4Q 2010 GDP is projected to have advanced 5.0% y-o-y compared with 6.8% for 3Q10.

According to DBS, the projected 6.6% full year GDP is the highest since 2006.

Sequentially, GDP growth is estimated to have quickened to 0.9% in 4Q (QoQ,sa) from 0.7% in 3Q. Consumption, investment (GDFCF) and net exports will all contribute positively to headline growth.

Private consumption will advance steadily at a rate of 4.9% YoY in 4Q10 on the back of a tight labor market signified by the fall of unemployment rate to 4.0% by end Dec from 4.2%in 3Q10. The surge of retail sales growth from 17.8% in 3Q to 18.9% in 4Q (3mma, sa) reflects the impact of rising inflation and persistent spending strength from mainland visitor (Chinese tourists spending accounts for about 70% of total visitor spending). On the investment front, GFCF is projected to expand 8.5% in 4Q, up from 0.3% in 3Q as evidenced by the collective optimism shown by the Business Tendency Survey 4Q10 published by the government. Public investment, the uptrend already observed on the building and construction component since 1Q10 is expected to hold because spending on infrastructure aiming at improving the transportation ties with the mainland will likely accelerate.