Singapore quarterly growth falls 14.6%

Singapore’s economy contracted by a record 10.1 per cent in the first three months of 2009 amidst signs that the city-state’s worst postwar recession may have bottomed.

The government maintained its forecast that the economy will contract between 6 per cent and 9 per cent this year in spite of the first quarter’s revised figures that showed a slight improvement over earlier official estimates for the January-March period.
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On a quarter-on-quarter, seasonally adjusted annualised basis, the economy shrank by 14.6 per cent against the government’s preliminary estimate a month ago of 19.7 per cent. The economic contraction appeared to be slowing since growth in the fourth quarter of 2008 fell by 16.4 per cent from the previous quarter.

Officials had estimated in April that the economy in the first quarter would contract by 11.5 per cent from a year ago. The economy contracted by 4.2 per cent in the fourth quarter of 2008 from a year earlier.

The government has warned, however, that trade-dependent economy faces a long and painful recovery, with some analysts believing that the unemployment rate could increase in the coming months. Exports declined in April after posting two months of recovery.

”There are some positive signs of a bottoming out. But it is not clear that we have begun to rebound from the bottom,” said Ravi Menon at the ministry of trade and industry, which released the data. Manufacturing contracted by 26.6 per cent and services by 10.3 per cent.

The government maintained its inflation rate forecast at minus one per cent to plus one percent as inflation slowed to 2.1 per cent in the first quarter from 5.4 per cent in the fourth quarter of 2008 due to a fall in commodity prices.