Singapore’s economy contracted last quarter, falling 4.9%. Not all analysts predict the current period will also be down, but don’t expect a robust expansion anytime soon. Prime Minister Lee Hsien Loong, in his New Year message, repeated the government’s forecast of 1% to 3% growth for this year. Singapore expanded at a sizzling 14.5% rate in 2010, a record.
There’s no mystery why Singapore’s economy, a regional bellwether, is in trouble. The country’s trade is about three times its gross domestic product, and the external outlook is not favorable. Prime Minster Lee, not surprisingly, blamed the deteriorating global environment in general and Europe in particular. “As a small, open country,” he noted in his message, “Singapore will inevitably be affected.”
And so will tiny Hong Kong’s trading economy. Analysts are talking about 2% growth this year, down from a forecasted 5% for 2011. The slowdown has already started. Growth estimates for last quarter range from a relatively optimistic 3.3%, from HSBC, to a gloomy 1.5%, issued by JP Morgan.
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