Singapore braces for sharply slower growth in 2012

SINGAPORE – Singapore on Monday predicted sharply lower economic growth of 1.0-3.0 percent in 2012 from an estimated 5.0 percent this year amid an export slowdown, and warned the situation could worsen.

“This does not factor in downside risks to growth, such as a worsening debt situation or a full-blown financial crisis in the advanced economies,” the Ministry of Trade and Industry (MTI) said in a statement.

“Should these risks materialise, growth in the Singapore economy in 2012 could come in lower than expected,” it added.

Singapore’s economy is regarded as a bellwether for Asia’s exporters.

The MTI said it expects Singapore’s electronics industry and other sectors that rely heavily on overseas orders to remain under pressure despite support from Asia’s better-performing economies.

“Although resilient domestic demand in emerging Asia will provide some support to global demand, it will not fully mitigate the effects of an economic slowdown in the advanced economies,” the MTI said.

Even the financial-services sector will be affected by heightened uncertainties in the external environment, it added.

The MTI’s forecast came as data released separately Monday by the trade promotion body International Enterprise Singapore showed electronics exports already tumbling 17 percent in the third quarter from a year ago.

Singapore’s economy, valued at Sg$284.6 billion ($219 billion) in 2010, grew a record 14.5 percent that year as it recovered strongly from a recession in 2009 when economic output shrank 0.8 percent.