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SINGAPORE: Singapore's economy in the third quarter is estimated to contract by 0.5 per cent compared with the same period last year.
The Ministry of Trade and Industry in releasing the latest economic growth figures for Singapore said Friday that it now expects the economy to grow by around 3 per cent for 2008.
That's a revision to the one made earlier in August, where the GDP forecast range was adjusted to 4-5 per cent, with growth expected in the lower end of the range.
With the economy shrinking at an annualised, seasonally adjusted quarter-on-quarter rate of 6.3 per cent in the third quarter, after contracting by an annual 5.7 percent in the previous quarter, this means Singapore has slipped into its first recession since 2002.
The ministry said external economic conditions have deteriorated more than expected and some sectors of the economy have weakened significantly.
The manufacturing sector for instance, has been weighed down by negative growth in the biomedical sciences, while the precision engineering and chemicals clusters have slowed because of weaker demand.
The financial crisis in the US in recent weeks has also made it more difficult for businesses to sustain economic activities, it said and warned that with US unemployment on the rise and house prices falling, the weaker American consumer sentiment will affect demand for exports from Asia and the rest of the world.
This means Singapore's export-oriented sectors, such as manufacturing, will be affected.
- CNA/sf
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