A Double Dip In Singapore's GDP?

Advanced estimates indicate that Singapore's Gross Domestic Product declined at an annual rate of 6.8% in the fourth quarter, after having risen sharply in the two previous quarters.  Such a pattern is not unusual in Singapore's experience, as can be seen in the first chart, and it does not necessarily suggest that Singapore is in for another recession.   Preliminary data for the fourth quarter and all of 2009 will be published in February.

The advanced estimates are based largely on production data for the first two months of the quarter--October and November in this case.  In addition to a typical industrial production index, Singapore produces indexes based on clusters of production in the chemical, electronic, biomedical, precision engineering and transport engineering industries.  The second chart shows  the trends in the indexes of the production for four of the five industry clusters.  Movements in the index for the fifth cluster, Precision Engineering, are shown in the table below.  Production in the chemical  and in the precision engineering clusters increased in October and November.  Production  in the electronics cluster increased in October but fell off in November while production in the transport engineering declined in both October and November. But the biggest change was the sharp declines in the production of biomedicals, mainly pharmaceuticals, in both October and November.  Production in the biomedical cluster has been subject to much wider swings than those of the other clusters and is responsible, in large part, for the erratic path of the quarterly changes in Singapore's GDP.

The year to year changes in real GDP are, perhaps, a better indicator of the course of Singapore's economy. These data are shown in the third chart and suggest that Singapore's recovery from recession is continuing.