SINGAPORE — Singapore is expected to slide deeper into recession this year before staging a weak recovery in the final quarter and registering mild growth in 2010, a central bank survey showed Monday.
Gross domestic product (GDP) is likely to fall 8.5 percent in the quarter to March from a year ago, more than double the 4.2 percent shrinkage in the fourth quarter of 2008, according to the survey of professional economists.
Singapore slipped into recession in the third quarter of last year ahead of its Asian neighbours.
The GDP decline would likely continue in the second and third quarters this year at 6.9 percent and 4.6 percent, respectively, before output grows at 0.5 percent in the final three months, the survey showed.
For 2009, the economy was expected to shrink by 4.9 percent —— just within the government’s forecast contraction range of 2.0 and 5.0 percent —— which would make it the worst recession since independence in 1965.
A recovery is expected in 2010, with the economists forecasting an average of 3.3 percent growth, the poll showed.
Singapore’s trade—driven economy grew just 1.1 percent last year from 7.8 percent in 2007 after a worldwide economic downturn weakened demand for its exports and fewer travellers visited the country.
Manufacturing is likely to bear the brunt of the downturn, with the sector forecast to fall by 19.6 percent in the first quarter this year, followed by the financial services sector, which is expected to drop 11 percent.
Exports are projected to plunge 27.4 percent during the quarter, according to the survey of 20 professional economists and analysts.
Singapore’s exports declined by 35 percent, the largest amount on record, in January from a year earlier.
February figures will be released on Tuesday, with DBS Bank saying it expects exports to have fallen 23.6 percent year—on—year.
"The general expectation is that it will be another dreadful month," it said in a market commentary.
Minister Mentor Lee Kuan Yew warned this month that GDP may contract by as much as 10 percent this year if exports continue to fall sharply. — AFP/vm