Singapore revises GDP growth as economy shrinks

SINGAPORE, Jan 21 – Singapore today further revised downwards its GDP growth for 2009, now to –5.0 from –2.0 per cent, as the ongoing decline in the world economy sends the republic into deeper recession.

Earlier this month, the government had forecast the republic’s GDP growth for the year would be between the range of –0.2 and 1.0 per cent.

The Ministry of Trade and Industry (MTI) said the preliminary estimates for the Singapore economy showed real GDP contracted by 3.7 per cent in the fourth quarter of last year following the decline of 0.2 per cent in the preceding quarter.

The MTI also revised downwards the inflation rate in 2009 to –1.0 to 0 per cent, largely in expectation of a continued downward correction of commodity prices from the peaks in 2008 in line with the weakening global economy.

It said the manufacturing, wholesale and retail trade, transport and storage, information and communications and financial services sectors registered further slowdowns compared to the third quarter of 2008.

The ministry said Singapore’s economy for 2008 was estimated to have grown by 1.2 per cent compared with 7.7 per cent in 2007.

The manufacturing sector was estimated to have contracted by 4.1 per cent, down from an expansion of 5.8 per cent in 2007, while growth in the wholesale and retail trade and the transport and storage sectors moderated to 2.6 per cent and 3.2 per cent, respectively, last year, from 7.3 per cent and 5.1 per cent in 2007.

MTI said after a robust 16.9 per cent growth in 2007, the financial services sector grew by 7.1 per cent in 2008, with the second half of the year seeing a significant decline in fund management and stockbroking activities following the global financial crisis.

Saying the economic downturn was expected to continue this year, the ministry said the weaker outlook for the Singapore economy compared to earlier forecasts reflected global economic activities had declined faster and deeper, and the spillover effects on key sectors of the economy would be stronger.

It said latest data in the past two weeks on retail sales and unemployment in the United States, industrial production in Europe and exports by Asian economies suggested that external demand conditions had weakened to a greater extent than earlier estimated.
“These developments will have a major impact on Singapore,” MTI added. – Bernama