On Nov. 19 Singapore declared that its severe recession is over after two straight quarters of growth. It also predicted the economy would expand by up to 5% in 2010.
Data from the Ministry of Trade and Industry showed gross domestic product (GDP) rose 14.2% in the July-September period on a quarter-on-quarter annualized basis after a 21.7% surge in the previous three-month period.
"Effectively, the recession in Singapore is over," said Ravi Menon, the permanent secretary of the Ministry of Trade and Industry (MTI). "Economies around the world are now turning the corner," he told a news conference. "Singapore has benefited from these global and regional trends."
Private-sector economists said Singapore sprang out of recession faster than many had predicted, but cautioned the road ahead remained bumpy. "Logically, if it's been accelerating so fast for two quarters, don't be surprised to see a deceleration in the fourth quarter," said Alvin Liew, an economist with Standard Chartered Bank.
Year-on-year, Singapore's GDP grew 0.6% in the third quarter compared with a 3.3% contraction in the April-June period, the MTI said in its third-quarter economic survey.
A recession is technically deemed over after two successive periods of quarter-on-quarter growth.
The 0.6% annual growth in the July-September period was the economy's first positive showing since the third quarter of 2008, when the city-state slid into a recession.
Growth in the third quarter was powered by the manufacturing sector, which posted expansion of 26.6% on a quarterly basis following a 58.5% surge in the April-June period, the ministry said.
In its outlook for 2010, the ministry forecast economic growth of 3%-5%, which would be a sharp turnaround from the existing projection of a contraction of 2%-2.5% this year.
"Global economic developments suggest that the recession has ended in most countries," the ministry said. "Singapore's economic outlook for 2010 will be closely linked to global conditions." It was the first time that the ministry has put out a growth forecast for 2010.
The city-state's trade-reliant economy was the first in Asia to sink into a recession last year as the global downturn hit demand for its exports, especially from the United States.
The U.S. economy's recovery from its recession will be key to Singapore's growth prospects, the ministry said. "The key economy to watch is the U.S. We see the recovery there continuing into 2010 but at a sluggish pace," said Menon. "We do not expect a collapse in U.S. private demand, however... but private demand will nonetheless be sluggish," he said.
Copyright Agence France-Presse, 2009