Singapore's economy shrank in the fourth quarter of 2007 as manufacturing growth shuddered to a near halt, official data showed Jan. 2, raising concerns about the Asian impact of U.S. economic woe. The city-state's economy, which like its neighbors depends on international trade, contracted 3.2% over the three months to December compared with the previous quarter, the figures showed.
"Growth of the Singapore economy moderated in the fourth quarter of 2007," the Ministry of Trade and Industry said, adding manufacturing growth slowed from 10.3% in the third quarter of 2007 to 0.5% in the fourth. he ministry said manufacturing growth waned mainly because of a slowdown in the biomedical sector. Manufacturing accounts for almost a quarter of Southeast Asia's most advanced economy, which is a major base for the production of advanced electronics parts like memory chips and computer hard drives. "Electronics production could remain under downward pressure in the coming months given expectations of weaker U.S. demand," said Citigroup economist Kit Wei Zheng.
Economics consultancy Moody's Economy.com called the figures "shocking" and said it was Singapore's first contraction for some four years. "Given that the global economy will soon enter a U.S.-led slowdown, orders for Singaporean products will decline," Sherman Chan, one of the firm's economists, said in a research note. "The Singaporean economy looks set to slow going forward," Chan added.
The economy expanded 6% in the fourth quarter compared with the same period in 2006, the data showed, below analysts' forecasts of 7%-8.5%. It grew 9% in the third quarter.
Copyright Agence France-Presse, 2008