Singapore’s economy shrinks, but no recession

SINGAPORE - Agence France-Presse

Singapore’s economy shrank by 1.5 percent in the third quarter, but avoided a technical recession after growth in the previous three months was adjusted upwards, government figures showed Oct. 12.

The Ministry of Trade and Industry said the export-driven city-state was still on track to achieve annual growth of 1.5-2.5 percent in 2012.

“Economic growth in the second quarter was better than expected, resulting in an upward revision of quarter-on-quarter annualized growth from the preliminary estimates of minus 0.7 per cent to (plus) 0.2 per cent,” it said.

Stronger growth

The revision was thanks to new data showing stronger growth in both industrial and residential building, it added.

Construction expanded 14.3 percent in the June quarter instead of 0.9 percent as earlier estimated.
Two successive quarters of negative growth are regarded as a technical recession. Singapore is seen as a bellwether for Asia’s leading economies because of its sensitivity to world trade.

“Technically, we averted a recession,” Song Seng Wun, a regional economist with CIMB Research, told AFP.

Jason Hughes, head of premium client management at IG Markets Singapore, described the data as “relatively good numbers for Singapore” and DBS Bank said it was maintaining its projection for the economy to grow by 1.8 percent this year.