News Room - Business/Economics

Posted on 10 Oct 2008

Singapore third quarter GDP shrinks 0.5 percent

Singapore's economy contracted in the third quarter as falling consumer demand from the U.S. and Europe hurt the city-state's manufacturing export industry, the Trade and Industry Ministry said Friday.

 

Gross domestic product fell 0.5 percent in the July-September period from the same quarter a year ago, the ministry said.

 

The government also cut this year's forecast for economic growth to 3 percent from between 4 percent and 5 percent, the ministry said.

 

"External economic conditions have deteriorated more than expected and some sectors of the economy have weakened significantly,'' the ministry said in a statement.

 

Manufacturing shrank 11.5 percent in the third quarter, while construction grew 7.8 percent and services rose 6.1 percent.

 

Compared to the previous quarter, the economy contracted a seasonally adjusted 6.3 percent in the third quarter, the ministry said.

 

The central bank, known as the Monetary Authority of Singapore, said in a statement Friday it shifted its foreign exchange policy to a "zero percent appreciation'' of the Singapore dollar from "a modest and gradual appreciation'' in a bid to boost the competitiveness of the country's exports.

 

The government left unchanged its 2008 inflation forecast at between 6 percent and 7 percent.