Singapore’s export-driven economy contracted 10.1 percent in the first quarter from the previous year, the government said yesterday, warning it saw no clear signs of a recovery in the immediate future.
The trade ministry maintained its forecast for the economy to shrink between 9 percent and 6 percent for the whole of this year as the city-state grappled with its worst recession since independence 44 years ago.
Compared with the previous quarter, GDP fell 14.6 percent in the first three months as Singapore’s major export markets remained mired in recession.
Singapore’s fortunes are dependent on the health of the world’s major economies, which buy much of the country’s exports, including microchips, pharmaceuticals and oilrigs.
The economy fell into recession late last year as the global economic downturn accelerated but still managed to grow 1.1 percent.
“The reason we have a forecast range of minus 6 [percent] to minus 9 percent [GDP decline] is because we really don’t know,” Ravi Menon, second permanent secretary at the trade ministry, said at a news briefing.
“What we are a little surer of is that we have probably seen the bottom ... But what we do not know is whether we are going to stay at the bottom for a little bit longer or whether we are going to start having a decisive rebound,” he said.
The key manufacturing sector contracted by 26.6 percent from the previous quarter’s shrinkage of 21.3 percent as the global downturn hurt demand for exports.
Services, another pillar of the economy, contracted 10.3 percent quarter-on-quarter as tourism-related arrivals tumbled, but the decline was less than the 15.0 percent fall in the previous quarter, the ministry said.
It painted a more optimistic outlook for the year, compared with its assessment last month, saying the sharp collapse in global trade late last year and early this year has tapered off.
“While trade is still expected to be weak for the rest of 2009, further declines of the magnitude seen earlier this year seem unlikely,” it said.
However, “on balance, there are still no decisive indicators of economic recovery,” the ministry said.
The trade ministry said it was maintaining its earlier projection that the country’s total trade with the rest of the world would shrink between 25 percent and 22 percent this year from last year. Key exports are forecast to contract by 13 percent to 10 percent this year.
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