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.
The IMF also sharply downgraded its growth predictions for most other economies in the Asia-Pacific region.
Singapore saw the biggest downward revision.
'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 the IMF.
'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.'
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.
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.
