Singapore’s economy shrank in the last three months of last year after surging for two straight quarters, sparking fears of a renewed recession.
The Trade and Industry Ministry said yesterday that GDP fell an annualized, seasonally adjusted 6.8 percent in the fourth quarter, led by a 38 percent plunge in manufacturing.
The economy grew 3.5 percent in the fourth quarter from the same period a year ago and contracted 2.1 percent for all of last year, the first fall in eight years, the ministry said.
The year “ended with a whimper rather than a bang for the Singapore economy,” said Robert Prior-Wandesforde, senior Asia economist with HSBC in Singapore.
The island’s economy — which relies on trade, finance and tourism — had bounced back from a 12-month recession by growing 15 percent in the third quarter and 22 percent in the second. But last quarter’s contraction puts into doubt how solid the recovery is.
The government is forecasting economic growth of between 3 percent and 5 percent for this year. HSBC expects a 6.5 percent expansion, Prior-Wandesforde said.
“We still expect a moderate recovery this year,” said David Cohen, an economist with consultancy Action Economics in Singapore.
Manufacturing was pulled down by poor performance in the biomedical sector, the ministry said. Pharmaceuticals, which are subject to big month-to-month swings in production and account for about a fifth of Singapore’s industrial output, slid 53 percent in November.