SINGAPORE – Singapore slashed its 2009 GDP forecast Wednesday for a second time this month, saying the economy could shrink as much as 5 percent, as the city-state reels from plunging demand for its exports.
Singapore's gross domestic product will likely contract between 2 percent and 5 percent this year, the Trade and Industry Ministry said in a statement. Earlier this month, the ministry cut its forecast to between 1 percent growth and a 2 percent contraction from an initial estimate of between 2 percent growth and a 1 percent contraction.
The ministry said the economy fell a seasonally-adjusted 16.9 percent in the fourth quarter, a bigger drop than the 12.5 percent contraction initially reported earlier this month. The economy grew 1.2 percent last year, less than the 1.5 percent expansion the government reported earlier.
Non-oil exports, which account for about two-thirds of GDP, will likely fall between 9 percent and 11 percent this year, down from the government's earlier forecast of between a 1 percent growth and 1 percent contraction, the ministry's International Enterprise Singapore said.
The government also lowered its inflation forecast for this year, now expecting a range between no change in prices and a 1 percent drop from an earlier estimate of prices rising between 1 percent and 2 percent. Prices fell 0.6 percent in December, the statistics department said.
Manufacturing fell 13.5 percent in December from the same month the year before and dropped 11 percent from the previous month, the government said.
