Singapore says it may avoid a recession despite the weak global economic outlook, after data showed the economy contracted less than expected in the last quarter of 2011 despite persistent weakness in electronics.
“The first month of trade numbers, export numbers are quite good,” Thia Jang Ping, a director at the Ministry of Trade and Industry, told a news conference.
“It's still too early to call, but our near-term indicators do not suggest an imminent danger of Singapore slipping very badly into a recession in the first quarter,” he added.
The economy shrank 2.5% in the fourth quarter from the preceding period on an annualised and seasonally adjusted basis, data showed yesterday.
Slowdown: Singapore’s port is seen through the downtown business district. The island nation says its trade and non-oil domestic exports are expected to grow by 3% to 5% this year, down from a rise of 8% and 2.2%, respectively, in 2011. — AP
The GDP data was better than an advance flash estimate of a 2.9% contraction, but worse than the median estimate for a 2.3 % decline by economists polled by Reuters.
From a year earlier, gross domestic product grew 3.6%. Singapore stocks and currency weakened yesterday although that was in line with the regional trend, with sentiment hit by a another delay in cementing a bailout package for Greece.
Singapore expects its economy to grow by 1% to 3% in 2012, down from last year's revised expansion of 4.9%, although it warned of risks to the forecast.
Asia is suffering the effects of slowing demand in the West, and the International Monetary Fund (IMF) last month warned that Europe's debt crisis could tip the world economy into recession.
A recession is often defined as two consecutive quarters of contraction, and Singapore, whose trade is three times GDP, tends to feel the chills from a deterioration in global economic conditions faster than most countries.
“Specifically, a disorderly sovereign default in the eurozone could precipitate a global financial crisis, while an escalation of geopolitical tension in the Middle East could trigger a global oil price shock,” Singapore's trade ministry said in a statement.
On Wednesday, South Korea said January exports fell 7% from a year ago in the biggest annual decline since October 2009, while Australia said its leading index of employment dropped in February in a sign that jobs growth could fall.
Singapore also said yesterday its trade and non-oil domestic exports were expected to grow by 3% to 5 % this year, down from a rise of 8% and 2.2%, respectively, in 2011.