ECONOMISTS have painted a grim picture of the economic outlook here, warning that Singapore will not be unscathed by the financial carnage sweeping rapidly across the United States and Europe.
'This downturn will be unlike previous downturns,' CIMB-GK economist Song Seng Wun told about 100 senior and middle-management staff of small businesses on Thursday at a business outlook seminar organised by the Singapore Business Federation (SBF).
'The private consumption slowdown in the US and Eurozone may have a significant knock-on impact on the rest of the world.'
Mr Song believes the expected sharp fall in global trade and financial flows could lead to Singapore's worst economic performance ever.
He predicted that in the worst-case scenario, Singapore's economic output could shrink between 3 per cent and 5 per cent next year from this year.
OCBC Bank economist Selena Ling was less pessimistic but maintained that the Government was likely to downgrade its official economic growth forecast of 4 per cent to 5 per cent for this year.
The Ministry of Trade and Industry releases its advance economic growth estimates for the third quarter today.
'What we're seeing now is that Asia is at an inflection point. Growth is slowing down,' said Ms Ling, citing broad-based weakness in the manufacturing sector, weakness in electronics and lacklustre performances in the biomedical and pharmaceuticals segments.
In his speech on Thursday, Mr Lee Yi Shyan, Minister of State for Trade and Industry, urged small businesses not to stop venturing abroad despite the economic slowdown.
'These challenging economic times also provide new opportunities for Singapore companies to venture overseas to seek opportunities in emerging markets such as Latin America, the Middle East, Russia and Vietnam,' Mr Lee said.