Regional economic powerhouse Singapore faces a severe recession after the economy contracted by more than five percent in the third quarter. Singapore's report comes as Asian economies struggle to recover from the widening global slump.
Singapore has reported its first aftershocks from the September 11 terrorist attacks in the United States, with the economy contracting 5.6 percent in the third quarter. A Ministry of Trade and Industry report also warns of a loss of business and consumer confidence. It says growth prospects will be poor until the overall global economy improves.
Singapore's annual growth for 2001 has all but disappeared in a dramatic slide from almost 10 percent last year. The economy also shrank in the second quarter, and the island state is now in a deep recession.
The ministry's report reveals the wide damage from the terror attack in the United States. Manufacturing fell almost 20 percent in the third quarter, while construction, which had been showing signs of picking up a few months ago, also contracted. The data reflect wider concerns within Southeast Asia. The Manila-based Asian Development Bank recently reduced its forecast for Asian and Pacific growth to 3.4 percent this year. The ADB says growth should rise to 4.5 percent in 2002. But the bank, in a report, says that although the global environment is uncertain, the damage from the September 11 attacks on regional economies remains manageable.
The bank says the economies with the greatest exposure to the U.S. high technology markets have suffered the most during the present downturn. Those economies, including Taiwan and Singapore, may see more job losses in the months to come.