Singapore's GDP To Decline 6% To 9% In 2009 Says Ministry Of Trade And Industry

The effect of the recession in the western industrial countries on the export oriented countries in Asia becomes more apparent every day. Today it is Singapore's turn. Advance estimates of Singapore's first quarter Gross Domestic Product show a seasonally adjusted annualrate of decline of 19.7% following a 16.4% rate of decline in the fourth quarter of 2008. (The Advance estimates of GDP for the first quarter of 2009 are computed largely from data for January and February. They are intended to be an early indication of changes in GDP and are subject to revision when more comprehensive data become available.)

On a year over year basis, GDP declined 11.5% in the first quarter, compared with a decline of 4.2% in the fourth quarter. The manufacturing sector, depending heavily on foreign demand, is the worst performing sector. It began to report year over year declines in the second quarter of 2008, and is now reporting a year over year decline of 29% for the first quarter of 2009. The Service industries have been affected by the decline in tourism and in the first quarter of 2009 were 5.9% below the first quarter of 2008. Construction has been the bright spot, showing large year over year increases as a result of a substantial backlog of committed projects in housing and infrastructure. The year to year changes in GDP, Manufacturing, Construction and Services are shown in the attached chart.

The Economic Development Board of Singapore publishes data for what they call "Production Clusters" that is, the output of firms producing some of Singapore's more important exports. There are clusters of Electronics, Chemicals, Biomedicals, Precision Engineering and Transport firms. These data are produced monthly and are an important part of the data on which the advance estimates of GDP are based. The declines in the clusters shown below help explain the sharp drop in manufacturing in the first quarter.

Given the sharp deterioration in Singapore's first quarter GDP and the prospect for continued weak global demand, the Ministry of Trade and Industry has reduced its estimate of GDP for the year 2009 to a range of -6% to -9% from its January 21 estimate of -2% to -5%.