Singapore: Singapore said on Wednesday it is facing its worst-ever recession, and cut the economic outlook for 2009 to a contraction of between 2% and 5%.
The downgrade is the second this month and reflects a faster and deeper decline in global economic activity, and stronger “spillover effects” on key sectors of the domestic economy, the Ministry of Trade and Industry said.
Its previous forecast ranged from a contraction of 2% to growth of 1%. The warning came as the city-state suffered its worst quarter-on-quarter fall in more than 30 years.
“The Singapore economy is going through its sharpest, deepest and most protracted recession,” said Ravi Menon, second permanent secretary with the ministry.
Singapore’s worst recession since independence in 1965 occurred in 2001 when the economy contracted by 2.4%, figures from the ministry showed.
Data released Wednesday confirmed a worsening recession in the country, where the economy shrank at a sharper pace in the fourth quarter than the government and economists had forecast.
On a seasonally adjusted, annualised quarter-on-quarter basis, the economy fell by 16.9%, after a decline of 5.1% in the third quarter and 5.5% in the second, the trade ministry said.
“The economy fell off the cliff in the fourth quarter,” said Song Seng Wun, a regional economist with CIMB-GK Research.
The fourth-quarter drop is the largest since records began in 1976.