Singapore Economy: 1Q09 GDP contracted 11.5%
The Ministry of Trade & Industry (MTI) has revised Singapore's gross domestic product (GDP) growth forecast for 2009 downwards to -6% to -9% year-on-year (yoy), which is lower than the -2% to -5% forecast released earlier on 21 Jan 09.
Advanced estimates show that 1Q09 GDP contracted 11.5% yoy, down from the 4.2% decline recorded for 4Q08.
| |
1Q08 |
2Q08 |
3Q08 |
4Q08 |
2008 |
1Q09 |
| Overall GDP |
6.7 |
2.5 |
0 |
-4.2 |
1.1 |
-11.5 |
| By sectors |
|
|
|
|
|
|
| Manufacturing |
12.6 |
-5.6 |
-11 |
-10.7 |
-4.1 |
-29 |
| Construction |
13.1 |
23.7 |
26 |
18.5 |
20.3 |
25.6 |
| Services sector |
7.5 |
7.5 |
5.5 |
-1.3 |
4.7 |
-5.9 |
Source: MTI
The manufacturing sector which took a steep 29% yoy contraction in 1Q09, down from the 10.7% decline in 4Q08, hurt by a decline in all key clusters including electronics and biomedical.
It is expected to remain weak for the rest of the year as the economies of Singapore's key trading partners remain in the doldrums.
The services industries carded a 5.9% yoy contraction for 1Q09, down from the 1.3% decline in 4Q08 as the global slowdown hit the wholesale and retail, as well as the transport sectors.
Poor global trade as well as weak tourist arrivals also contributed to the decline. The financial services continued to contract as well, however at a slower pace compared to 4Q08.
The only bright spark was the construction sector, which recorded a relatively strong 25.6% yoy growth for 1Q09, up from the 18.5% growth recorded in 4Q08. Growth was underpinned by a pipeline of housing and infrastructure projects.
The revised GDP forecast was made after the key exports, or non-oil domestic exports (NODX), fell by an estimated 17% in March from a year ago.
International Enterprise (IE) Singapore now expects total trade for Singapore to decline by between 22-25%, against an earlier projection of between –19% and –17%.
In a response to the dire export numbers, the Monetary Authority of Singapore (MAS) has re-centre its exchange rate policy band which in effect devalues the Singapore dollar by between 1% and 3%, says economy watchers.
For further details
Click here for MTI press release
Click here for IE Singapore's press release
Click here for MAS policy statement
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