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Singapore economy may shrink as much as 5% in 2009, gov't says+(Japan Economic Newswire Via Acquire Media NewsEdge) SINGAPORE, Jan. 21_(Kyodo) _ Singapore could plunge into its worst-ever recession this year, with the government Wednesday warning the economy could shrink as much as 5 percent due to the worsening global economic crisis. The Ministry of Trade and Industry lowered its projection for gross domestic product growth to a range between a 5 percent shrinkage and a 2 percent decline. Singapore's worst recession was in 1964, before independence, when the economy contracted 3.8 percent. Its last recession was in 2001 when GDP shrank 2.4 percent. "The Singapore economy is going through its sharpest, deepest and most protracted recession," Ravi Menon, a senior ministry official, said at a press conference. He said the slowdown stemming from a "collapse in external demand" has spread throughout the wealthy city-state's trade-dependent economy. Just three weeks ago, the ministry projected GDP could decline as much as 2 percent in the worst case, but added it could also grow by 1 percent. The economy grew 1.2 percent last year compared with 7.7 percent in 2007, the ministry said. The economy had already drifted into technical recession last year with several quarters of decline. In the October to December quarter last year, GDP plunged 17 percent, which an official said is "like a fifth of the economy has shrunk." The government has already hinted it could dip into the country's vast reserves to help Singaporeans tide over the current slump, which is expected to batter companies and put thousands out of work. The government is expected to announce proposals to help the economy when it unveils this year's budget Thursday. Another official from the Monetary Authority of Singapore at the press conference said the current slowdown is not due to an erosion in Singapore's competitiveness. Therefore, in terms of monetary policy, there is "no reason for any persistent weakness of the Singapore dollar," he said. Copyright ? 2009 Kyodo News International, Inc. |