SINGAPORE: Singapore's economy is expected to contract four to six per cent this year, up from an earlier projection of a six to nine per cent fall.

A statement by Singapore's Ministry of Trade and Industry (MTI) on Tuesday said the adjustment reflected an upward revision in first quarter performance, as well as strong second quarter growth.

A strong pharmaceuticals sector boosted second quarter economic output, after four straight quarters of contraction.

Preliminary data showed real gross domestic product (GDP) rising by an annualised and seasonally adjusted rate of 20.4 per cent compared to the first three months of the year.

The services producing industries and the hotels and restaurants industries continued to see declines in on-year terms.

The wholesale and retail trade sector, as well as the financial services sector, remained weak but saw less severe contractions.

Year-on-year, second quarter GDP is expected to contract 3.7 per cent.

Real GDP contracted by 12.7 per cent on-quarter in the January to March period after seasonal adjustments, smaller than the contraction of 14.6 per cent estimated in May.

On a year-on-year basis, the economy for the first quarter of 2009 contracted by 9.6 per cent.

MTI warned of a weak economic recovery susceptible to downside risks for the rest of the year.

- CNA/yb