Singapore's sluggish economy is expected to pick up pace in the second-half of the year as exports improve despite high oil prices, meaning the official growth target of 2.5 percent to 4.5 percent is still within reach, economists said.
There were concerns the Southeast Asian economic powerhouse would slip into its second recession in five years after GDP shrank 5.5 percent on a quarterly basis in the first three months.
It was the first such decline since the second quarter of 2003 and fears of a second straight quarter of negative growth, the technical definition for a recession, were further raised with poor export figures in April and May.
On an annual basis, GDP growth in the first quarter came in at an annual 2.5 percent, its weakest performance since the third quarter of 2003.
However economists believe the worst could be over amid signs key global industries that Singapore's exports feed, particularly electronics, are picking up.
"We're optimistic ... there are little indicators here and there suggesting a recovery," said Chua Hak Bin, a senior regional economist at Singapore's DBS Bank.
Chua emphasized there had been a steady drop in US electronics inventories since the start of the year, while projections of global chip sales have been revised upwards to around 6.0 percent for this year from flat growth or contraction.
"We think the second quarter will bottom out ... US inventory is coming down slowly," said Chua who is sticking by his forecast that Singapore's GDP will grow 4.2 percent this year from 8.4 percent last year.
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