Singapore Economy To Remain Weak In 2009

Channel NewsAsia reported today that Singapore's economy, which is already in a technical recession, will remain weak in 2009 on projections the global economic outlook will deteriorate further, the central bank said Tuesday.

As a financial crisis evolves to impact economic activity worldwide, the city-state is likely to be hammered given its heavy exposure to external demand, the Monetary Authority (MAS) said in its Macro Economic Review.

"Looking ahead, the outlook for the global economy has deteriorated amidst heightened risk aversion and deleveraging in the financial sector," MAS said.

As a small and open trading economy, Singapore is vulnerable to any downturn in its major export markets such as the United States, Europe, China, India and Japan.

"The risks to external demand conditions continue to be on the downside, and a more severe global slowdown cannot be discounted," the MAS warned.

"Taking all these factors into account GDP growth is expected to be around 3.0 per cent in 2008, and the economy will continue to grow below its potential rate into 2009," the MAS said.

Prospects for a recovery late next year hinge on the performance of key global economies, it said.