Singapore Economy in 2009 to Reduce

Singapore's Gross Domestic Product is expected to reduce by 5 percent in 2009, far more than the 1 to the contraction of 2 percent expected earlier this month, the government said.

The Ministry of Trade and Industry said it expects a decline in GDP of between 2 and 5 percent this year.

The Singapore economy grew by 1.2 percent in 2008, the government said, well below growth of 7.7 percent in 2007. Slowdowns in manufacturing, trade, transport and storage, information and communications and financial services sectors has contributed to the decline, the government said.

The world financial crisis led to a significant decrease in fund management and securities brokerage activities in the second half of 2008 and greater than expected fall in 2009, said the ministry.

The ministry quoted data on retail sales and unemployment in the U.S. industrial production in Europe and Asia in exports for the weaker outlook.

Inflation is expected to ease slightly, however.

The finance minister is expected to deliver the 2009 budget statement on Thursday.