Singapore's economy contracts 10.1 per cent in first quarter (Roundup)

May 21, 2009, 5:34 GMT

   Singapore - Singapore's export-reliant economy contracted 10.1 per cent in the first quarter compared with a year ago and could shrink by 6 to 9 per cent for the whole year, the government said Thursday.

   Amid the global economic downturn, the city-state was in its worst recession since independence from Malaysia in 1965.

   'There are still no decisive indicators of economic recovery,' the Ministry of Trade and Industry said in a statement.

   'At this point in time, any new risk, such as an acute worsening of the influenza A (H1N1) situation or undisclosed weaknesses in US or European banks coming to light, could set back the process of economic recovery by several quarters,' it said, referring to the recent outbreak of swine flu.

   According to figures released Thursday by the International Enterprise Singapore government agency, the city-state's external trade in the first quarter slumped 28 per cent from the same period a year ago after a 9.6-per-cent decline recorded in the previous quarter.

   The contraction 'was larger than expected and can be attributed to the synchronized slowdown in global demand' for both oil and non-oil trade, the trade-promotion agency said.

   For the whole year, total trade was expected to shrink 22 to 25 per cent. In the first quarter, total trade was at 133 billion US dollars.

   The final numbers for Singapore's gross domestic product (GDP) were slightly better than estimates issued in April when the government expected GDP for the first quarter to shrink 11.5 per cent year-on-year.

   However, the government maintained its forecast that GDP for the whole of 2009 would drop as much as 9 per cent.

   In 2008, the Singapore economy grew by 1.1 per cent, compared with 7.8 per cent a year earlier.

   On a quarter-to-quarter basis, Singapore's GDP dropped 14.6 per cent from January to March and 16.4 per cent in the last quarter of 2008.

   In the first three months of 2009, manufacturing slumped 26.6 per cent, worse than the contraction of 21.3 per cent in the previous quarter.

   The service industry suffered a 10.3-per-cent decline in the first quarter, less than the 15-per-cent drop recorded a quarter earlier.