Singapore’s economy contracted by 4.9 percent quarter-on-quarter in Q4 2011, affected by the sharp decline in manufacturing, as the Eurozone economic slowdown hurt demand for Asian exports.
According to the Ministry of Trade and Industry (MTI), the country’s GDP dropped 4.9 percent on a seasonally adjusted, annualised rate, attributed to the 21.7 percent decline in manufacturing output.
Singapore, whose trade is approximately three times GDP, is considered Southeast Asia’s bellwether, due to its small domestic economy and dependence on global investments and trade.
The country’s GDP expanded 3.6 percent in Q4 from a year ago, slowing from the 5.9 percent growth in Q3.
Meanwhile, MTI estimated that the country’s economy jumped 4.8 percent for the whole of 2011, in line with its economic growth forecast of about 5.0 percent for the year.
“A renewed slump in manufacturing output as a pullback in pharmaceuticals exacerbated the steady downturn in the electronics sector,” said George Washington, Chief Economist for Asia Pacific at IFR Markets.
Looking ahead, Wu Kun Lung, an economist at Credit Suisse, said Singapore’s economy may further weaken in the present quarter before recovering later in 2012.
“We think Q1 2012 will probably be the bottom for the overall Singapore economy. If you look at US indicators, they are definitely improving. The biggest risk is from the euro zone, but right now our base case assumption is that they will avoid a disorderly type of break-up scenario.”
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