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Wednesday, 25 March 2009

Worst may be over soon

THE worst of the economic crisis may soon be over, according to an economist from the Nanyang Technological University (NTU).

Drawing from selected leading indicators that appear be to signalling a turning point, Assistant Professor Choy Keen Meng predicts that Singapore's recession will bottom out in the current first quarter and turn the corner by year's end.

He expects the economy to shrink by 4 per cent this year, a forecast that is more optimistic than most.

Although the official projection is for a contraction of between 2 per cent and 5 per cent, some private sector economists have predicted a decline as severe as 10 per cent.

'The leading indicators suggest that the worst will be in the first quarter and we will see improvements in the second and third quarters,' Prof Choy said during a presentation on the economic outlook at NTU yesterday.

One of these key indicators is the United States' purchasing managers' index, which rebounded in January and last month after seeing a steep plunge towards the end of last year.

This index is a forward-looking signal of manufacturing output in the US.

Other indicators used include the Straits Times Index, business expectations surveys, as well as the amount of non-oil cargo loaded and discharged at Singapore's sea ports.

'Some of these indicators are showing signs of improvement, and while others are declining, the declines have moderated,' he said.

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