SINGAPORE -- The Singapore government announced Tuesday that it expects the country' gross domestic product (GDP) to contract by 6.0 to 9.0 percent in 2009, lower than the earlier forecast of a contraction between 2.0 to 5.0 percent.
Singapore's Ministry of Trade and Industry (MTI) said that advance estimates indicate that economic activity slowed down sharply in the first quarter of 2009.
On a seasonally adjusted annualized basis, real GDP contracted by 19.7 percent compared to the previous quarter, worse than the 16.4 percent contraction in the fourth quarter of 2008. Compared to the same period last year, real GDP is expected to contract by 11.5 percent, compared to the 4.2 percent contraction registered in the last quarter.
The MTI said its earlier forecast had factored in the likelihood of a weak first quarter, but the advance estimates indicate that actual GDP growth will "undershoot earlier expectations by a significant margin."
The MTI said the decline in the first quarter of 2009 affected every sector, with the exception of the construction sector.
In year-on-year terms, the manufacturing sector is estimated to have contracted by 29.0 percent in the first quarter, compared to the 10.7 percent contraction in the last quarter of 2008. The services producing industries contracted by 5.9 percent in the first quarter over the same period last year. The wholesale and retail trade sector as well as the transport and storage sector were also severely affected in the first quarter of 2009.
The MTI said that for the rest of 2009, these sectors will continue to be weighed down by the poor prospects for global trade.
The construction sector was the only sector that showed signs of robust growth. It is estimated to have grown by 25.6 percent in the first quarter of 2009, supported by the strong pipeline of committed projects in both housing and infrastructure.
The MTI said that the global economy is expected to remain weak in the coming quarters. While there are tentative signs of some stabilization in the housing, financial and manufacturing sectors in the United States, they do not point to a clear turnaround in economic activity.