Singapore's descent sharper than expected

Singapore's descent sharper than expected

SINGAPORE (AFP): The Singapore economy turned negative in the
second quarter for the first time since the Asian financial
crisis with growth contracting by 0.9 percent, the government
said Friday.

The grim year-on-year figures were reflected in the employment
statistics which showed 5,600 job losses, 72 percent higher than
the 3,248 retrenchments in the first quarter.

The ministry of trade and industry said the forward-looking
indicators point to continued weakness in the Singapore economy,
but it was maintaining its full-year growth forecast of 0.5 to
1.5 percent.

The 0.9 percent contraction in gross domestic product (GDP),
telegraphed by Prime Minister Goh Chok Tong is his somber
National Day message this week, was worse than last month's
initial estimate of 0.8 percent shrinkage.

In the first quarter, GDP rose a revised 4.7 percent year-on-
year.

With the country in recession due to weak global demand,
especially for electronics, the ministry of trade and industry
said all sectors of the economy registered slower growth except
for financial services.

The crucial manufacturing sector, which had double-digit
growth in 1999 and 2000, contracted by a sharp 9.6 percent in its
worst performance in 16 years.

"This was due mainly to the electronics products industry
which deteriorated further to fall by 19 percent. All key
segments, except computers, saw negative growth," the ministry
said in a statement.

Almost 9,000 workers have been laid off so far this year and
the worst is yet to come.

"Unemployment is likely to rise further in the months ahead as
the full impact of the economic downturn filters into the labor
market," the trade ministry said.

The weakening external outlook will have a significant impact
on trade-dependent Singapore with its heavy reliance on
technology exports.