Singapore

RGE's Q1 2010 Singapore Outlook

After rebounding in Q2 and Q3 2009, Singapore's GDP growth returned to negative territory in Q4 2009, led by the sharp drop in biomedical production due to waning inventory restocking and exports. Non-pharmaceutical industrial output and exports, by contrast, have turned around. Singapore’s economy will return to positive growth in Q1 2010. Growth will be driven by the large fiscal stimulus while private consumption and investment will grow sluggishly throughout 2010. By the end of Q2 2010, the impact of inventory restocking, fiscal stimulus and base effects will fade, and quarterly economic growth will plateau. After contracting by 2.1% in 2009, RGE forecasts Singapore’s GDP to grow by 5.0% in 2010. Large external surpluses offer ample fiscal room to stimulate growth during 2009-10, but monetary policy will become restrictive toward the end of 2010 amid inflationary pressures. Due to Singapore’s small domestic consumption base and a sluggish recovery in global export demand, RGE forecasts a U-shaped recovery for Singapore. The economy is unlikely to return to its 7.0% plus pre-crisis growth rates in the next few years. Exports moved to positive territory in November 2009, led by base effects, inventory restocking and import demand by China and the Asian Tigers, and a slower contraction of...

Read the Q1 2010 Singapore Outlook.