Post crisis, Singapore's economy shrinks 6.8 per cent in Q4

As leading nations shrug off the worst global recession barring the UK, Singapore's economy shrunk 6.4 per cent in the fourth quarterof 2009, led by a 38 per cent plunge in manufacturing, while growth for the entire year is still negative at -2.1 per cent.

The trade and industry ministry said today that the country's economy grew 3.5 per cent in the October-December period from the same period a year ago and gross domestic product shrunk 6.8 per cent in the fourth quarter, although it was lower than analyst expectations of a 0.8 per cent decline following the 2.1 per cent fall in the third quarter.

Manufacturing led the fall by 38 per cent, which was a complete reversal from the 29.6 per cent growth seen in the third quarter. The fall was due to decrease in output from pharmaceuticals and transport engineering, the ministry said in the course of releasing preliminary estimates.

However, the electronics, chemicals and precision engineering clusters posted positive growth, while construction grew by a seasonally adjusted and annualised 4.3 per cent from the previous quarter, as also the service sector, which grew 7.2 per cent.

As the economies of the US, Japan and Europe are emerging from the recession, Singapore's growth for the entire year is still negative, at -2.1 per cent and is expecting a 3-5 per cent growth for 2010.

In November, the government had declared the recession as over, but its economy, which is reliant on trade, finance and tourism, will face immense competition from the other Asian upcoming economic powers like South Korea, Thailand and Vietnam.