The announcement came as government data showed Singapore’s economy shrank a seasonally adjusted 16.9 per cent in the fourth quarter from the previous quarter – the largest contraction since the government began publishing the indicator in 1975.
|Singapore has been heavily impacted by the global economic downturn [AFP]|
The ministry said it now expected Singapore’s gross domestic product – the value of all goods and services produced – for this year to contract between two and five per cent.
“These developments will have a major impact on Singapore,” it said in a statement.
“Global economic activity has declined faster and deeper, and the spillover effects on key sectors of the economy will be stronger.”
The previous two government forecasts for 2009 had allowed for the possibility that there may be some slim expansion of Singapore’s economy this year, but that now seems increasingly distant.
Last year the economy grew at 1.2 per cent, according to revised figures also released on Wednesday, while in 2007 the economy had registered 7.7 per cent growth.
The government has said it plans to battle recession by boosting infrastructure spending and public aid in its 2009 budget, scheduled to be announced on Thursday.