Singapore’s Economy Contracts at 14.6% Rate

Reuters - 21 May 2009

Singapore saw signs on Thursday that its worst-ever recession is bottoming out after its economy shrank less than expected in the first quarter.

Singapore’s economy shrank at an annualized and seasonally adjusted rate of 14.6 percent in the quarter, less than a Reuters median forecast for a 17 percent fall and also lower than preliminary government estimates of a 19.7 percent drop, final data showed.

Like other export-dependent nations in Asia, Singapore’s economy has been hit hard by the global downturn following the slump in the U.S. housing market and credit crunch.

The Singaporean economy has shrunk for four consecutive quarters, but the government said if it started recovering in the second half of the year, full-year G.D.P. could shrink 6 percent, at the low end of its forecast for a 6 to 9 percent contraction.

“It’s not a pretty picture despite the revision,” said Song Seng Wun, economist at Malaysian bank CIMB in Singapore. “It’s just a less dark picture.”

G.D.P. in the first three months of the year fell 10.1 percent from a year earlier, also less than expected and a smaller fall than 11.5 percent reported in the earlier April data, but still the worst ever.

Singapore’s non-oil exports slipped back in April from March following two months of growth, reinforcing the view that while the worst of the downturn may be over, there is no clear sign of recovery.

“In short, there are some positive signs of a bottoming out, but it is not clear that we have begun to rebound from the bottom,” Ravi Menon of the Ministry of Trade and Industry said at a briefing, pointing to a slide showing green shoots and brown weeds.