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.
DISRUPTIONS: The high-speed rail is to operate as normal, while several airlines either canceled flights or announced early departures or late arrivals Schools and offices in 15 cities and counties are to be closed today due to Typhoon Gaemi, local governments announced last night. The 15 are: Taipei, New Taipei City, Taoyuan, Tainan, Keelung, Hsinchu and Kaohsiung, as well as Yilan, Hualien, Hsinchu, Miaoli, Chiayi, Pingtung, Penghu and Lienchiang counties. People should brace for torrential rainfall brought by the storm, with its center forecast to make landfall on the east coast between tonight and tomorrow morning, the Central Weather Administration (CWA) said. The agency issued a sea warning for the typhoon at 11:30pm on Monday, followed by a land warning at 11:30am yesterday. As of
CASUALTY: A 70-year-old woman was killed by a falling tree in Kaohsiung as the premier warned all government agencies to remain on high alert for the next 24 hours Schools and offices nationwide are to be closed for a second day today as Typhoon Gaemi crosses over the nation, bringing torrential rain and whipping winds. Gaemi was forecast to make landfall late last night. From Tuesday night, its outer band brought substantial rainfall and strong winds to the nation. As of 6:15pm last night, the typhoon’s center was 20km southeast of Hualien County, Central Weather Administration (CWA) data showed. It was moving at 19kph and had a radius of 250km. As of 3pm yesterday, one woman had died, while 58 people were injured, the Central Emergency Operation Center said. The 70-year-old
SEA SEARCH: Nine crew members of a cargo ship had taken to the water after the vessel sunk off the southern coast, with a rescue effort under way, officials said The strongest typhoon to hit Taiwan in eight years yesterday killed three people and flooded parts of the nation’s second-biggest city, while rescuers were searching for nine sailors after their cargo ship sank in the storm. Typhoon Gaemi transformed streets in Kaohsiung into rivers, with some households flooded. Offices and schools were closed for the second consecutive day, with thousands of people evacuated. Three people died and 380 were injured due to strong winds and torrential rainfall brought by Typhoon Gaemi, the Central Emergency Response Center said. The typhoon made landfall in Yilan County’s Nanao Township (南澳) at midnight yesterday and departed Taiwan
Taiwanese athletes yesterday and on Saturday edged closer to winning a medal in a strong showing in the first two days of the Paris Olympics. Taiwanese badminton ace Tai Tzu-ying (戴資穎) defeated Belgium’s Lianne Tan in the group stage of the women’s singles yesterday. Although Tai has not played in any professional competitions in the past three months due to injuries and Olympic preparations, the Taiwanese dispatched Tan in a swift 38 minutes, winning 21-15, 21-14. It was Tai’s third consecutive career victory over Tan. The 30-year-old Taiwanese was next to play longtime friend and rival, Thailand’s Ratchanok Intanon, in the group stage. Per Olympic