With uncertainties in the external environment, the Ministry of Trade and Industry (MTI) has forecasted that the Singapore economy to grow between -1.0 percent to +2.0 percent next year. In a worst case scenario, Gross Domestic Products (GDP) will contract by 1.0 percent and in the best case scenario GDP will grow at 2.0 percent over 2008. This is a weak performance compared to 6 to 8 percent we are accustomed to in recent times.
For the third quarter of this year, GDP contracted by 0.6% against corresponding quarter in 2007.
On an annualised quarter-on-quarter basis, GDP growth declined by 6.8 per cent in the third quarter, compared to a fall of 5.3 per cent in the second quarter. This is two successive quarter declines in GDP growth rate which resulted in Singapore going into technical recession.
The largest contraction in GDP for the third quarter came from the manufacturing sector followed by hotels & restaurants sector. As for the other sectors of the economy, the growth had slowed when compared with the previous quarter.
For the whole of this year, MTI revised down the earlier estimate of GDP growth forecast to around 2.5 percent. This is low when compared with 7.7 percent achieved in 2007.
The only piece good news is that the consumer price index (CPI) inflation forecast has been revised lower to 1 to 2 percent due to falling global commodity prices and stable HDB housing prices.
(Source: MTI Press Release, 21 November 2008)
Written on 11/21/2008 8:35 PM
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