Singapore slashed its growth forecast for this year for a second time this month, saying the economy could shrink as much as 5 percent, as the city-state reels from plunging demand for its exports.
During the last two weeks, weaker-than-expected retail sales, unemployment and industrial production in the US and Europe, as well as falling Asian exports forced the government to rethink its expectations for this year, the Trade and Industry Ministry said yesterday.
Singapore’s GDP is now expected to contract by between 2 percent and 5 percent this year, the ministry said. The previous two forecasts had allowed for the possibility that the economy would expand this year.
“These developments will have a major impact on Singapore,” it said in a statement. “Global economic activity has declined faster and deeper, and the spillover effects on key sectors of the economy will be stronger.”
The ministry also revised down last year’s economic growth to 1.2 percent from 1.5 percent, following a 7.7 percent expansion in 2007.
The economy shrank a seasonally adjusted 16.9 percent in the fourth quarter from the previous quarter, the largest contraction since the government began publishing the indicator in 1975.
Compared with the same quarter a year ago, the economy shrank 3.7 percent.
“In all, this will mark the worst recession in Singapore’s history,” said Kit Wei Zheng, an analyst with Citigroup in Singapore.
Singapore’s reliance on exports to drive growth is high even by the standards of export-dependent Asia, making it highly sensitive to the fortunes of major developed economies.
The government has said it plans to battle recession by boosting infrastructure spending and public aid in this year’s budget, scheduled to be announced today.
“All eyes will now be towards Thursday’s budget, which no doubt will be aggressive,” said Prakriti Sofat, an economist with HSBC in Singapore.
Non-oil exports, which account for about two-thirds of GDP, will likely fall between 9 percent and 11 percent this year, down from the government’s earlier forecast of between a 1 percent growth and a 1 percent contraction, the ministry’s trade promotion agency, International Enterprise Singapore, said yesterday.
The government also lowered its inflation forecast for this year, now expecting a range between no change in prices and a 1 percent drop from an earlier estimate of prices rising between 1 percent and 2 percent. Prices fell 0.6 percent last month and 4.3 percent last year, the statistics department said.
Super Typhoon Kong-rey is the largest cyclone to impact Taiwan in 27 years, the Central Weather Administration (CWA) said today. Kong-rey’s radius of maximum wind (RMW) — the distance between the center of a cyclone and its band of strongest winds — has expanded to 320km, CWA forecaster Chang Chun-yao (張竣堯) said. The last time a typhoon of comparable strength with an RMW larger than 300km made landfall in Taiwan was Typhoon Herb in 1996, he said. Herb made landfall between Keelung and Suao (蘇澳) in Yilan County with an RMW of 350km, Chang said. The weather station in Alishan (阿里山) recorded 1.09m of
STORM’S PATH: Kong-Rey could be the first typhoon to make landfall in Taiwan in November since Gilda in 1967. Taitung-Green Island ferry services have been halted Tropical Storm Kong-rey is forecast to strengthen into a typhoon early today and could make landfall in Taitung County between late Thursday and early Friday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, Kong-Rey was 1,030km east-southeast of Oluanpi (鵝鑾鼻), the nation’s southernmost point, and was moving west at 7kph. The tropical storm was packing maximum sustained winds of 101kph, with gusts of up to 126 kph, CWA data showed. After landing in Taitung, the eye of the storm is forecast to move into the Taiwan Strait through central Taiwan on Friday morning, the agency said. With the storm moving
NO WORK, CLASS: President William Lai urged people in the eastern, southern and northern parts of the country to be on alert, with Typhoon Kong-rey approaching Typhoon Kong-rey is expected to make landfall on Taiwan’s east coast today, with work and classes canceled nationwide. Packing gusts of nearly 300kph, the storm yesterday intensified into a typhoon and was expected to gain even more strength before hitting Taitung County, the US Navy’s Joint Typhoon Warning Center said. The storm is forecast to cross Taiwan’s south, enter the Taiwan Strait and head toward China, the Central Weather Administration (CWA) said. The CWA labeled the storm a “strong typhoon,” the most powerful on its scale. Up to 1.2m of rainfall was expected in mountainous areas of eastern Taiwan and destructive winds are likely
The Central Weather Administration (CWA) yesterday at 5:30pm issued a sea warning for Typhoon Kong-rey as the storm drew closer to the east coast. As of 8pm yesterday, the storm was 670km southeast of Oluanpi (鵝鑾鼻) and traveling northwest at 12kph to 16kph. It was packing maximum sustained winds of 162kph and gusts of up to 198kph, the CWA said. A land warning might be issued this morning for the storm, which is expected to have the strongest impact on Taiwan from tonight to early Friday morning, the agency said. Orchid Island (Lanyu, 蘭嶼) and Green Island (綠島) canceled classes and work
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