Singapore GDP Grew by 1.1 per cent in 2008

The Ministry of Trade and Industry (MTI) released the economic report card on Singapore today. The last time MTI reported on Gross Domestic Product (GDP) figures were based on preliminary estimates. It has now revised downward the GDP growth rate for last year from 1.2 per cent to 1.1 per cent.

 

In 2008, the economy grew by 1.1 per cent over previous year. This was a significant drop from 2007 of 7.8 per cent growth. The fourth quarter’s real GDP growth was the worst for the year contracting at 4.2 per cent over the corresponding period of previous year (i.e. year-on-year).

 

Year-on-Year GDP Per Cent Changes by sectors:

 

Sector

2007

4Q08

2008

Total

7.8

-4.2

1.1

Goods Producing Industries

7.2

-6.5

-1.0

    Manufacturing

5.9

-10.7

-4.1

    Construction

18.2

18.5

20.3

Services Producing Industries

8.1

-1.3

4.7

   Wholesale & Retail Trade

7.4

-5.3

2.6

   Transport & Storage

5.0

-2.4

3.1

   Hotels & Restaurants

4.9

-0.1

1.2

   Information &

   Communications

6.5

5.4

7.2

   Financial Services

15.7

-8.1

5.5

   Business Services

9.1

5.2

7.4

(Source: MTI Press Release dated 26 February 2009)

 

The biggest drag on the economy in 2008 came from the manufacturing sector with a contraction of 4.1 per cent.  Electronics, precision engineering, biomedical manufacturing and chemicals sectors declined because of the slowdown in exports, especially in the last quarter of 2008.

 

Construction sector was the star performer in 2008 growing at 20.3 per cent which was better than 18.2 per cent in 2007. However, the sector showed sign of slowing in the fourth quarter (18.5 per cent) from third quarter (26.0 per cent) year-on-year. It was forecast that slowdown will continue this year due mainly to deferment of several private sector projects and slowdown in industrial building activities.  

 

The services producing industries contracted 1.3 per cent in the fourth quarter. Of all the services sectors, the financial services sector took a big hit in the current economic crisis.

 

“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,” reports MTI.

 

We can expect poor performance of the financial services sector in 2009 as the world is trying to get out of this financial crisis which sparked the economic recession.

 

Written on 1/21/2009 11:42 AM

 

Copyright © 2009, the author known as LKT in Singapore.

 

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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