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SINGAPORE - Singapore on Thursday declared a severe recession over as data showed its economy grew for the second straight quarter in the three months to September.
Official data released on Thursday showed gross domestic product (GDP) expanded 14.2 per cent in the July-September period on a quarter-on-quarter annualised basis following a 21.7 per cent surge in the previous quarter.
"Effectively, the recession in Singapore is over," Ravi Menon, permanent secretary with the Ministry of Trade and Industry (MTI), said at a media briefing.
"Economies around the world are now turning the corner... Singapore has benefited from these global and regional trends."
Year-on-year, Singapore's GDP grew 0.6 per cent in the third quarter compared with a 3.3 per cent contraction in the April-June period, the MTI said in its third-quarter economic survey.
The 0.6 per cent annual growth in the July-September period was the economy's first positive showing since the third quarter of 2008, when the city-state slid into a recession.
Growth in the third quarter was powered by the key manufacturing sector, which posted expansion of 26.6 per cent on a quarterly basis following a 58.5 per cent surge in the previous quarter, the ministry said.
Other sectors also turned in a positive display including the wholesale and retail industries, which grew 10.8 per cent after a 7.9 per cent increase in the second quarter, it said. Wholesale and retail make up two-thirds of the economy.
In its outlook for 2010, the ministry forecasted economic growth of 3.0-5.0 per cent while maintaining its existing projection of a contraction of 2.0-2.5 per cent this year.
"Global economic developments suggest that the recession has ended in most countries," the ministry said in a statement accompanying the quarterly survey. "Singapore's economic outlook for 2010 will be closely linked to global conditions."
The city-state's trade-reliant economy was the first in Asia to sink into a recession last year as the global downturn hit demand for its exports, especially from the United States.
Its worst recession since gaining independence in 1965 took place in 2001 when GDP shrank 2.4 percent.
The US economy's recovery from its recession will be key to Singapore's growth prospects, the ministry said.
"The key economy to watch is the US. We see the recovery there continuing into 2010 but at a sluggish pace," said Menon. "We do not expect a collapse in US private demand, however... but private demand will nonetheless be sluggish," he said.
The US economy, a major market for Asia's export-led economies including Singapore, has emerged from a prolonged recession that started in late 2007 as its GDP grew 3.5 per cent in the July-September period.
It was the world's largest economy's first economic expansion since the second quarter of 2008 but analysts have cautioned the recovery remained fragile. - AFP/vm
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