Note: Singapore was the first Asian country to go into a recession on 21 November 2008. (Read here: Singapore officially in recession – BBC).
By Susan Fenton (Reuters)
HONG KONG, Dec 11 (Reuters) – Singapore is poised to be emerging as Asia’s worst-performing economy next year, when it is likely to remain entrenched in recession as the global downturn erodes demand for its exports, a Reuters poll shows.
The poll predicts the island state’s gross domestic product (GDP) will contract 1.1 percent in 2009. That marks a rapid deterioration in the economic environment from two months ago as the global financial crisis has deepened — a similar poll in late September forecast 4.6 percent GDP growth in 2009.
“Singapore is particularly open to external trade — its export-to-GDP ratio is more than 180 percent, compared with an Asia average of 60-70 percent,” said Eric Tsang, an analyst at Calyon in Hong Kong.
“So as U.S., European and Japanese consumers spend less that will hurt Singapore‘s exports and have a knock-on effect on the rest of the economy.”
Economists see some rebound in 2010, forecasting 4.2 percent growth, but that would be well below average annual growth of 6.8 percent between 2003 and 2007.
Singapore slipped into recession — defined as two quarters of negative quarterly growth — in the third quarter.
Philip McNicholas, an economist at Ideal Global in Singapore, said the first quarter of next year would be especially tough — he forecasts GDP will drop at an annualised rate of 15 percent, seasonally adjusted, as exports plunge.
“That will be mainly due to a collapse in U.S. sentiment,” McNicholas said. “The U.S. plans a fiscal stimulus package early next year, but it’s got to get that through Congress and to the people, so that may not be until the end of Q1 or the start of Q2.”
The government pledged $1.5 billion last month to help firms secure credit and said it was prepared to run a bigger budget deficit to boost the economy.
Manufacturing accounts for about a quarter of the economy and factory output fell 12.7 percent in October from September, seasonally adjusted, and 12.6 percent from a year earlier, led by sliding electronics and drugs output.
Manufacturing is expected to be harder hit next year as the downturn in advanced economies accelerates and job losses in the sector will rise as a result, analysts say.
Rising unemployment will dent consumer spending, which is not being helped by a decline in tourism since August.
As the weak economy will encourage the authorities to keep monetary policy loose, the Singapore dollar is likely to remain sluggish, the poll forecast.
Picture not from Reuters report.
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Jesus Christ……..this is getting more and more ridiculous….
The worst economy in asia ? Time to migrate liao…….keke
hahaha…cos we have the best ppl, highest pay ppl running the country that y we are in the worst economy! they took all our $$$!!! imagine 40plus million per year!!
First country to go into recession.
Asia’s weakest economy.
NTUC Chief wants to “upturn the downturn’.
And PM Lee is missing in action – same as when Mas Selamat first happened, same as when minibonds crisis happened.
Our “golden period” didn’t last very long, did it?
Golden Period is turning into a nightmare.
A City of Possibilities indeed.
the way they pay themselves like nobody business, in time to come we may even face depletion in our nation reserve, all will be gone soon.
Are our leaders getting credit for this?
Just realised that my comments (#3) sounded like a poem. LOL!
It was not intentional.. :)
I wonder why there has been a trend of capable and talented singaporeans migrating steadily each year – 1 000.00 per year!
I pray jb IDR become successful. For what, I cannot reveal for my personal safety.
so minister salary should also be the lowest in asian countries.
wait for singapore economy back to highest then minster can take highest salary.
should be same as a salesman.
got do sales got commission.
no sales no commission.
can or not mr lee?
report card fail, still dare to pay themselves million dollar salaries.
first in asia to pay themselves million dollar salaries but also first to lead its people into recession.
“A” team indeed.
CNA article says this…lol….
“Singapore is the only country, apart from Japan and Korea, to have a number one ranking. The financial background is very strong, so as a trading outpost you will be very badly affected, but you will be the first to recover after that.”
donche so like dat lah, MSM people also TOC fan readers wor.
sometimes, they specially write here also leh.
donche pray pray ah.
MSM bombastic wor.
Citigroup in a recent report, ‘Surviving Recession, Re-thinking Globalisation – Confronting Challenges of a ‘post-crisis’ world says, “Challenges that face Singapore in the ‘post-crisis’ future – falling demand, cost-competitiveness, structural relocation, widening income gap – are daunting”.
Tan Zhi Zhong (#7),
Duh.. Singapore started going downhill since 1992 but the demise only became more apparent after the Asian Financial Crisis because we were unable to return to our 1997 living standards. Singaporeans, who can see through the PAP’s lies, also know if they were to challenge PAP they will only face persecution. Where do these people go? They migrate before their S$ assets reduce to nothing. Better to cash out now than never. Why don’t they go and openly challenge PAP? Because everyone else is too scared to join the struggle. Singaporeans only have themselves to blame.
minster should take a $1 salary like last time apple ceo or some of the ceo now.
when things are very good then they get bonuses.
since singapore is also a big company, should follow the ceo who take $1.
can or not mr lee?
if previously my salary increase by 50%.
now i reduce my salary by 25%.
it is still increase.
should reduce salary by 50% or more.
then consider a real decrease.
i think government maths something wrong.
very easy math am i right mr lee?
no need to have an elite to count correctly.
i am correct very sure mr lee.
Donaldson Tan wrote about Light At The End of The Tunnel on TOC in Oct 2008.
Prime Minister Lee Hsien Loong said No Global Depression last week.
Guess what Reuters wrote? Signs of the Times: Light at the end of the tunnel goes out
i will never know will you see the things written at toc mr lee.
but i know you surely got see.
if i am the pm i will see also.
how people scold you (should be giving feedback).
nobody will know.
only heaven knows.
but please do not play politics and arrest us.
we are only small citizen.
theses are true voices from the heart.
hope after you see you can change for the better.
It is ok to die and be forgotten.
it is not ok to live with stinking reputation
We need to take note that the general public is often misled by the MSM hiding the truth about the economy. This downturn is not unexpected, but many may not have been prepared. Have the govt investment bodies been a little too careless?
Oh goodie!
Lower GDP = no excuses for pay rise = motivated ministers who earn lesser but do more.
I wonder how much progress did singapore made since 1997 Financial crisis, 2001 financial Crisis and the current Financial Tsunami and I no no when it will ever get out of this #$#! given that it is the FIRST in the entire, complete, total , whole wide asia to go into recession?
why ?
aiyoyo
economy so gloomy, why the ELITEs package so bright huh?
aiyoyo
Don’t worry folks. Our trusted CNA says:
S’pore expected to be first Southeast Asian country to recover from crisis.
But who the hell is this “economic forecaster Thierry Apoteker”???
Pluck from thin air?
aiyoyo
#16 – not a bad idea leh..
CEO get $1 salary, then bonus peg to stock price,
then the ELITEs bonus peg to GDP la…
commoners at least can feel the work done by ELITEs ma…
if not how can ELITEs be called ELITEs huh?
aiyoyo
Singapore’s economy is too aligned to the US and it is surprising that we have not changed much after the 2003/03 recession.
PM tries to steer the ship into other sectors but fail as we do not have a huge domestic market as China, Malaysia or Australia. We also lack the entrepreneur spirit within us to venture into other markets. Many abroad have set up businesses in hot spots such as China, Vietnam and Thailand but most of our Singaporean businesses have not venture broad yet in a large way.
We also fail to stir up small businesses as we are all trained to be workers and seldom like to take risk and venture into small businesses. In HK, Taiwan, Australia, at least 20% of their GDP is generated from small one-man businesses. This is viable perhaps because of their huge domestic market.
In China, many go into one-man businesses anything from internet shops to handphone businesses. A large group of them goes into eateries which never fail to generate profits due to their huge population.
In Singapore, if you go to food business, you have to pay about $5K rental in a good location foodcourt or around $3K if you sell chicken rice in the coffee shop. Rental almost drowns many one-man show businesses.
Going forward, we have to slowly detach purselves from an export-oriented market or else we may drown ourselves. Our domestic market is small and hardly matters. The IRs, I feel will probably help the casinos make more money and may only benefit less than 40% of our local workforce. The rest of the jobs will go to the foreigners.
If our govt fails to get us out of this current crisis, heads may roll and our people may be in for a very hard long road ahead.
“In Singapore, if you go to food business, you have to pay about $5K rental in a good location foodcourt or around $3K if you sell chicken rice in the coffee shop. Rental almost drowns many one-man show businesses.”
And have you heard of the higher of base rental or base rental +. What a way to go.
Hip hip hooray. Who is creating value and who is diverting value with fixed static asset in which it is plentiful in so many countries.
No. 26 Andrew “But who the hell is this “economic forecaster Thierry Apoteker”???”
Mr Apoteker is an iconoclastic economic forecaster. His company, T-A-C, boasts a client list that includes more than 30 major banks and corporations as well as official institutions like the European Commission, the Asian Development Bank and Unctad.
That said, he’s an economist. It’s like a politician trying his hand at investments. He has no idea where Singapore is headed as far as politics is concerned. Maybe his prediction is based on ceteris paribus in terms of Singapore politics.
I believe we will recover, though not necessarily the first. Long overdue changes to overhaul our political system and trim excesses must take place at this opportune time, even as we work towards a recovery.
The recent ‘economists’ forecast is for Singapore’s GDP growth for next year is in the range of 1%. Considering how far off these experts have been these past two years, it will come as no surprise if in fact there is no growth at all when the time comes.
Dare the govt assure us that these forecasts can be trusted or are we looking at the deceiving devil once again, telling us there is a glimmer of hope even though it knows there is no hope of recovery in the coming next few years?
This PAP govt has lost all sense of honesty. It is even playing with its own integrity which is very close to zero as of this moment. It’s reputation has gone down the drain and rightfully so with the amount of shit is it playing with these days.
I remember the old wise (now stupid) man said S’pore economy not badly affected by the US financial problem. He said we hv China & India to depend on, his prediction is totally wrong, China & India also hv their own economic and unemployment problems. So how to rely on these 2 major economies. He try to be smart but not this time.
If all the so-called experts can be trusted, the world would not be in this state of affair anymore. There are more ‘experts’ today than the past.
the report is released with political motives
unstable external events will generally get more vote for PAP, as singaporean are si kiasi that they think only PAP can drive them out of desperation
GE is coming
Yup, GE is coming!
Saw George Yeo on tvMobile this morning.
30. logicalman
Thierry Apoteker is just punting on STI index to go pass 4000 pct in third quarter of 2009 from 1700 pct now.
Sg economy is an open one and we rely a lot on USA, they cough, we vomit. Is there any other way we could do to rely less on USA?
The PAP want you to “stay and move together with them”, as we are all in the same boat and have to “row in the same direction”. This is a case of the blind leading the blind/blinkered (66.6% there!)/outraged-but-can’t-do-anything brigade (that’s us here!).
More Good Years ahead – something has gone wrong with the alphabet and Years have become Tears. More Good Tears!
A City of Possibilities – possible retrenchments (they have happened!), possible suicides (SMRT trains, here we come), possible suits (the legal, not Ermenegildo Zegna ones)…
As the Great Eastern slogan and LG acronym go: “Life’s Great” and “Life’s Good” – we are indeed entering a golden period of doom and gloom!
suddenly everyone resposible seem to find the perfect excuses to point whatever adverse performance to the “financial tsunami”.
Hw i wish I can tell my boss that i m unable to deliver because of external factors which is beyond my control and still get my pay month (and my pay is less than $ 3000 everything in ) haha
at least take ownership lah. i would like to use a phase i heard today ; i “you seldom hear me talk so serious, but i am not in the mood to joke” “every minute & seconds count” – who say that huh?
37)Anthony
I am abit pessimistic here as we over rely too much on external exports especially to the US. As much as half or more of our exports go to the US and we are dead meat now as US is in recession. Worse, China and India are also going through their own tough times now and we have a double whammy.
We may need to find our own niche market here. The IRs may not work for us as casinos frankly is a competitive dying trade and may benefit the owners (Sands) more than the country. They make all the big bucks so call and jobs are limited to the locals due to inexperience here.
Maybe Singaporeans really need to expose their entrepreneurial skills more in this down period. We need people to take more risk to venture out and curve out a name for themselves. We are educated in at least two languages and considered rather smart in our own ways. Surely, we can make a mark overseas?
China is a huge market which is untapped by us. So is Vietnam, Thaland and even Indonesia.
Our educational or political system may be self-limiting so much so that we dare not venture out to make a living for ourselves. We rather slave behind a desk from 8 to 5 and make a salary of $4 K a month. Are we too soft? Too complacent? Are we unable to dirty our hands too much? I don”t know.
Many will find out that nowadays jobs are never stable. They come and go as companies will fire as soon as their bottomline is breached. One now needs to be very nimble to make a living. Living simply may also be the answer here.
emerging as Asia’s Worst performing?
I URGE our leaders work hard and improve the economy.
we all know the problems and constraints.
enough of that.
Now, SOLUTION is needed.
Please make our economy Perform and do the needful.
We are concerned and thus watching.
problem with the elites is that they only know how to attract MNCs to create jobs for the people. it seems like to they do not know any other method to grow the economy.
their failure to develop any local MNCs in manufacturing that can compete globally is one of the reasons why our economy so dependant on the US. Korea also started off like us as Asian tiger but they were able to grow their MNCs like Hyundai, LG, Samsung and compete globally. Initially their products were not very good but now with investment and R&D they are almost on par with the Japanese. and they manage to do all this inspite of their constant threat of war and having strong industrial unions that are constantly organising strikes.
28) Gilbert Goh on December 12th, 2008 10.44 am
Singapore’s economy is too aligned to the US and it is surprising that we have not changed much after the 2003/03 recession.
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Agree that singapore leaders should come up a plan and a clear and confident one that can ASSURE the electorate that it can make singapore less reliant on USA such that we are more immune from the flu bug of USA.
We need Solutions. the ’97, ’01 and current crisises in a row has given too much time to understand the need to be less RELIANT on USA.
I urge you to act now.
please do the needful.
1 lesson too costly.
constraints constraints constraints.
enough of that. talents – produce the solutions.
I agree with Gilbert.
Singapore or rather, LKY had never believed in locals being able to hold our own. He only envisioned us as workers … all these 40 years.
In the end, Singapore had never invested in its people and its own industries. In fact, the climate produced more slaves than enterprise.
And we are suffering from his failed vision and policies, like the Stop At Two.
Singaporeans got sold on the immediate benefits as usual but lost on the long term focus.
I believe LKY’s mentioning of the golden era is a sign of the times. How many empires never recover after their so called golden era?!
If I have the means, I will migrate. Singapore’s future is not bright. Not for the average joe like me.
Everyone around us is changing but Singapore is still living on its own dream of grandeur. It will be very painful when we wake up.
During good time when global economy is growing and export is leaving the country by the ship load, it is easy to manage a small country but the test is when the tide turned what could they do to get us out of this recession, million dollar ministers? Sadly they are no difference from all the other in our neigbouring country. PAP regime is equivalent to a one club golfer. They had known our export rely solely on USA years ago and they did not diversify or creat alternative industry as a fall back except perhap attempt to create Sinkapore as a financial centre for S.E.Asia which sadly was a failure. Failure to make good use our large reserve is another point which demand answer. S. Korean and Saudi used its large reserve to lease land for agriculture. China had done the same as well. We should have lease land from our neigbours as well if we stop picking fight with them. It seemed we are very good in belttling our neigbours over the years.We spend more then our neigbours on defence and possessed more hardware then them which all add up to bad feeling toward us. We could have invested more goodwill toward our neigbours instead of seeking confrontation over minor matters. Whether it is too late to make amend now and hoped in years to come we could still seek the one thing that we truly lack, land.