Frbiz.com Reported Singapore Economy Shrinks 6.8pc

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SINGAPORE'S economy shrank 6.8 per cent in the fourth quarter to December from the

previous three months, but the slowdown was less than expected for the whole year, the trade ministry said.

The decline in gross domestic product (GDP) was attributed to weakness in the key manufacturing sector, which shrank 38.4 per cent on a seasonally adjusted quarter-on-quarter annualised basis, it said.

The slide in manufacturing, a dramatic reverse from the 29.6 per cent growth of the third quarter, was mainly due to a fall in output from pharmaceuticals and transport engineering, the ministry said, releasing preliminary estimates.

"However, the electronics, chemicals and precision engineering clusters posted positive growth," it said in a statement.

Compared with the previous year, however, GDP rose 3.5 per cent in the fourth quarter.

The ministry confirmed Prime Minister Lee Hsien Loong's New Year's Eve announcement that the economy contracted 2.1 per cent in 2009 after being hammered by the global economic crisis, but less than originally feared.

Lee said the economy is expected to grow between 3.0 and 5.0 per cent this year.

Singapore's trade-reliant economy became the first in Asia to slip into recession in the third quarter of 2008 after the fall of US investment bank Lehman Brothers sparked a crisis that led to a collapse in global consumption.

The government declared the recession over in November, but cautioned that the strength of its recovery will depend on the pace of rebound in Singapore's major trading partners such as the US, the European Union and Japan.

With the economy contracting less than feared, Singapore escaped what could have been its worst recession since independence in 1965, thanks in part to a 20.5 billion Singapore dollar ($A16.16 billion) government stimulus package.

Singapore's worst recession on record is the 2.4 per cent contraction in its GDP following the collapse of the technology bubble in 2001.

by: heiyou

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