Singapore Preliminary GDP Estimate for 2009Q1 and Revised Forecast for 2009

On April 14th, Singapore's Ministry of Trade and Industry released its preliminary GDP estimate for the first quarter of 2009. It has also revised its economic forecast for 2009. Below are some of the highlights:

On the GDP Estimate for the First Quarter of 2009:

On a seasonally adjusted annualized basis, real GDP contracted by 19.7 per cent compared to the previous quarter, worse than the 16.4 per cent contraction in the fourth quarter of 2008. Compared to the same period last year, real GDP is expected to contract by 11.5 per cent, compared to the 4.2 per cent contraction registered in the last quarter.

The decline in the first quarter of 2009 affected every sector, with the exception of the construction sector. Falling external demand in late 2008 and early 2009 has severely affected domestic manufacturing output. In year-on-year terms, the manufacturing sector is estimated to have contracted by 29.0 per cent in the first quarter, compared to the 10.7 per cent contraction in the last quarter of 2008. The manufacturing decline was led by the electronics and precision engineering segments, but the chemicals cluster and the biomedical manufacturing cluster also saw large declines. With most of Singapore's key trading partners still in recession, the manufacturing sector will continue to remain weak for the rest of the year.

The services producing industries contracted by 5.9 per cent in year-on-year terms. The collapse in global trade in recent months severely affected the wholesale & retail trade sector and the transport & storage sector in the first quarter of 2009. For the rest of 2009, these sectors will continue to be weighed down by the poor prospects for global trade. ... The hotels & restaurants segment also contracted because of lower tourist arrivals. Financial services also continued to contract, but at a more moderate pace compared to the previous quarter.

The construction sector was the only sector that showed signs of robust growth. It is estimated to have grown by 25.6 per cent in the first quarter of 2009, supported by the strong pipeline of committed projects in both housing and infrastructure.

On 2009's GDP Forecast:

While there are tentative signs of some stabilization in the housing, financial and manufacturing sectors in the US, they do not point to a clear turnaround in economic activity. In recent months, the International Monetary Fund, the World Bank and the Organization for Economic Co-operation and Development have successively slashed their 2009 growth forecasts for the world, the developed economies, and regional economies.

Taking into account the sharp deterioration in the first quarter of 2009, and the weak global outlook for the rest of the year, MTI is revising the economic growth forecast for 2009 to -9.0 to -6.0 per cent.

A pdf copy of the report can be found here.