Singapore Cuts GDP Forecast as Global Crisis Deepens

Singapore’s economy may shrink more than previously forecast in 2009, the government said, citing the worsening global recession and foreshadowing a deepening slump throughout the region.

“The global economic crisis has worsened since November, with sharp declines in global demand, trade and investments,” the trade ministry said in a statement today. The economy may contract as much as 2 percent this year, twice as much as a Nov. 21 prediction, it said.

Singapore is speeding up its response to the global slowdown and will unveil more steps to help companies and minimize job cuts when it brings forward its 2009 budget announcement to this month, Prime Minister Lee Hsien Loong said Dec. 31. Policy makers around the world have cut lending rates and increased spending to sustain growth.

“It’s going to be a tough time across Asia,” said Alvin Liew, an economist at Standard Chartered Plc in Singapore. “We don’t see any bright spots in the Singapore economy, especially in the first half.”

Gross domestic product contracted an annualized 12.5 percent in the fourth quarter from the previous three months, after shrinking a revised 5.4 percent between July and September. The Southeast Asian economy has declined for three straight quarters, joining Japan, Hong Kong and New Zealand in recession.