Singapore Economy Shrinks 11.5 pct in 1Q Print E-mail

AP – 13 April 2009

Singapore's economy plummeted in the first quarter, prompting the government to slash its 2009 forecast Tuesday for a fourth time as demand for the city-state's exports evaporated amid the worst global slowdown in decades.

Gross domestic product plunged an annualized, seasonally adjusted 19.7 percent in the first quarter from the previous quarter and fell 11.5 percent from a year earlier, the Trade and Industry ministry said Tuesday in a statement.

The government now expects the economy to shrink between 6 percent and 9 percent this year from a previous forecast of a drop between 2 percent and 5 percent, the ministry said.

"Singapore is going through a particularly challenging phase," said Taimur Baig, director of Asia economics for Deutsche Bank  in Singapore. "What you get is a very weak outlook for production and employment going forward."

Non-oil exports, which accounted for about 60 percent of GDP last year, fell 26 percent in the first quarter from a year earlier, and the ministry said it expects sales abroad to contract between 10 percent and 13 percent from a previous forecast of a drop between 9 percent and 11 percent.

One bright spot was exports rose a seasonally adjusted 11 percent in March from the previous month, the ministry's International Enterprise Singapore said in a statement. March exports fell 17 percent from a year earlier.

Imports fell 28 percent last month from a year earlier and dropped a seasonally adjusted 4.7 percent from the previous month, the ministry said.

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