<TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR>S'pore economy may shrink 10%: IMF
</TR><!-- headline one : end --><TR>It may be Asia's worst performer and could shrink slightly next year </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Fiona Chan
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->THE International Monetary Fund (IMF) has slashed its forecast for Singapore's growth this year, saying the economy could decline 10 per cent to end up as the worst performer in Asia.
The Republic is also the only country in the region that the IMF expects to keep shrinking next year, albeit marginally, while most other economies will see flat or weak growth.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story -->RELATED LINKS
<!-- Audio --><!-- Video --><!-- PDF -->
SHARP DOWNGRADES
<!-- Photo Gallery -->
</TD></TR></TBODY></TABLE>These dire forecasts were released in the IMF's latest regional economic outlook, launched yesterday at the MAS Building.
In the report, the IMF also sharply downgraded its growth predictions for most other economies in the Asia-Pacific region.
Singapore saw the biggest downward revision, said IMF representative Joshua Felman, who was in town to present the report. Last November, the IMF projected that Singapore's economy would shrink by 1.4 per cent this year.
'If you look around the region, what you see is the countries that have been hit hardest in the crisis have two characteristics: They are the most open economies and they are the ones that specialise in manufacturing,' said Mr Felman.
'Singapore fits well under both categories, and that's why we expect that the decline in output this year is really going to be quite sizeable.'
But he stressed that 'a lot of the forecast comes from what has already taken place in the fourth quarter of last year and the first quarter of this year'.
Singapore's economy shrank by 16.4 per cent quarter-on-quarter in the fourth quarter of last year and by a further 19.7 per cent in the first quarter of this year.
These record contractions prompted the Government to downgrade its own forecasts last month, and it is now projecting a decline of 6 per cent to 9 per cent for the full year.
Mr Felman dismissed signs of 'green shoots' that have been emerging lately, for instance in regional exports.
'Definitely there are encouraging signs, but they're really much more signs of stabilisation rather than of recovery,' he said.
While Asian economies may see some 'small bounce off the bottom', there are still two 'big things weighing down Asia' - the continuing recessions in the United States and Europe, as well as the looming increases in unemployment in Asian countries.
A 'recovery' in terms of sustained quarterly growth will arrive in Singapore and Asia only next year and even then, they will not return to pre-crisis levels.
But some economic watchers thought the IMF's take was too pessimistic.
Dr Chua Hak Bin of Citigroup, who spoke in a panel discussion at the IMF event yesterday, said the institution was 'unnecessarily gloomy' about the outlook for Asia.
He noted that Asia's historical experience has shown that recessions tend to be followed by V-shaped recoveries, especially in small open economies such as Hong Kong and Singapore.
Citigroup economist Kit Wei Zheng, who was also at yesterday's launch, said a forecast of minus 10 per cent growth for this year meant that Singapore's 'recovery' would be L-shaped - that is, a sharp downturn and then stagnancy.
'The IMF forecast does not seem to square with the indicators that we are seeing, including the fact that exports are rebounding quite smartly in month-on- month terms,' he said.
Mr Manu Bhaskaran, director and chief executive of Centennial Asia Advisors, also suggested that Asia could be 'more resilient' than expected.
Speaking at the IMF event, he said there appeared to be more 'shock absorbers' in place in this recession, with surprisingly few companies reporting bounced cheques and asking banks for payment extensions. [email protected]
</TR><!-- headline one : end --><TR>It may be Asia's worst performer and could shrink slightly next year </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Fiona Chan
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->THE International Monetary Fund (IMF) has slashed its forecast for Singapore's growth this year, saying the economy could decline 10 per cent to end up as the worst performer in Asia.
The Republic is also the only country in the region that the IMF expects to keep shrinking next year, albeit marginally, while most other economies will see flat or weak growth.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story -->RELATED LINKS
<!-- Audio --><!-- Video --><!-- PDF -->
<!-- Photo Gallery -->
</TD></TR></TBODY></TABLE>These dire forecasts were released in the IMF's latest regional economic outlook, launched yesterday at the MAS Building.
In the report, the IMF also sharply downgraded its growth predictions for most other economies in the Asia-Pacific region.
Singapore saw the biggest downward revision, said IMF representative Joshua Felman, who was in town to present the report. Last November, the IMF projected that Singapore's economy would shrink by 1.4 per cent this year.
'If you look around the region, what you see is the countries that have been hit hardest in the crisis have two characteristics: They are the most open economies and they are the ones that specialise in manufacturing,' said Mr Felman.
'Singapore fits well under both categories, and that's why we expect that the decline in output this year is really going to be quite sizeable.'
But he stressed that 'a lot of the forecast comes from what has already taken place in the fourth quarter of last year and the first quarter of this year'.
Singapore's economy shrank by 16.4 per cent quarter-on-quarter in the fourth quarter of last year and by a further 19.7 per cent in the first quarter of this year.
These record contractions prompted the Government to downgrade its own forecasts last month, and it is now projecting a decline of 6 per cent to 9 per cent for the full year.
Mr Felman dismissed signs of 'green shoots' that have been emerging lately, for instance in regional exports.
'Definitely there are encouraging signs, but they're really much more signs of stabilisation rather than of recovery,' he said.
While Asian economies may see some 'small bounce off the bottom', there are still two 'big things weighing down Asia' - the continuing recessions in the United States and Europe, as well as the looming increases in unemployment in Asian countries.
A 'recovery' in terms of sustained quarterly growth will arrive in Singapore and Asia only next year and even then, they will not return to pre-crisis levels.
But some economic watchers thought the IMF's take was too pessimistic.
Dr Chua Hak Bin of Citigroup, who spoke in a panel discussion at the IMF event yesterday, said the institution was 'unnecessarily gloomy' about the outlook for Asia.
He noted that Asia's historical experience has shown that recessions tend to be followed by V-shaped recoveries, especially in small open economies such as Hong Kong and Singapore.
Citigroup economist Kit Wei Zheng, who was also at yesterday's launch, said a forecast of minus 10 per cent growth for this year meant that Singapore's 'recovery' would be L-shaped - that is, a sharp downturn and then stagnancy.
'The IMF forecast does not seem to square with the indicators that we are seeing, including the fact that exports are rebounding quite smartly in month-on- month terms,' he said.
Mr Manu Bhaskaran, director and chief executive of Centennial Asia Advisors, also suggested that Asia could be 'more resilient' than expected.
Speaking at the IMF event, he said there appeared to be more 'shock absorbers' in place in this recession, with surprisingly few companies reporting bounced cheques and asking banks for payment extensions. [email protected]
They have an axe to grind with Singapore and are jealous of the successful island nation. 
