Singapore’s economy grew by 1.1% in 2008

Source : Channel NewsAsia - 26 Feb 2009

Singapore’s economy, already in recession, shrank 4.2 per cent in the fourth quarter of 2008 from a year earlier, with overall annual growth coming in at 1.1 per cent, the government said on Thursday.

The Ministry of Trade and Industry (MTI) said it was maintaining its 2009 forecast of a shrinkage in gross domestic product (GDP) of between 2.0 and 5.0 per cent.

On a seasonally adjusted annualised quarter-on-quarter basis, GDP declined 16.4 percent in Q4 last year, the ministry said in its economic survey.

“The economy is likely to continue to perform weakly in the first half of 2009,” the ministry said. “The spillover effects of the global crisis will have an impact on many sectors.”

Initial estimates released last month by the government showed the economy grew 1.2 per cent in 2008.

The manufacturing sector declined by 10.7 per cent in the fourth quarter, similar to the preceding quarter. Most of the clusters, particularly electronics, precision engineering and chemicals, contracted.

Growth in the construction sector slowed to 18.5 per cent, from 26.0 per cent in the third quarter, weighed down by a slowdown in industrial building activity and the deferment of several private sector projects.

The services-producing industries as a whole contracted by 1.3 per cent, down from the 5.5 per cent growth in the previous quarter. All sectors, except information and communications and business services, contracted.

Growth in the financial services sector fell by 8.1 per cent on the back of significant declines in trading activities in foreign exchange and stock brokerage, fund management and Asian Currency Units.

MTI said the sharp decline in world trade towards the end of 2008 also resulted in contractions in the wholesale and retail sector (-5.3 per cent) and the transport and storage sector (-2.4 per cent).

For the whole of 2008, MTI said the manufacturing sector contracted by 4.1 per cent, compared to a growth of 5.9 per cent in 2007.

With the exception of the transport engineering sector and general manufacturing, the majority of manufacturing sectors (electronics, chemicals, biomedical manufacturing and precision engineering) contracted in 2008.

The construction sector grew strongly by 20.3 per cent in 2008, outperforming the growth of 18.2 per cent in the previous year.

Overall growth of the services producing industries slowed to 4.7 per cent in 2008, compared to 8.1 per cent in 2007.

The slowdown was led by significantly slower growth in most of the industries, in particular, the wholesale and retail trade, hotels and restaurants, and financial services.