- The Washington Times - Thursday, February 27, 2003

SINGAPORE, Feb. 27 (UPI) — Although Singapore managed to stave off a technical recession in 2002, with a small economic recovery in the fourth quarter, its growth remains weak and very dependent on the U.S. economy and the recovery pace of the global electronic sector, a senior official said Thursday.

"Singapore's 2003 economic performance will be shared by two imponderables — namely the outcome of the U.S.-Iraq conflict, which will be a huge swing factor for the U.S. economy and by extension the global economy, and the pace of the recovery of the global electronics industry, which cannot be taken for granted," said Friedrich Wu, director of the economic division at the Ministry of Trade and Industry.

On Thursday, the MTI unveiled the final 2002 economic survey, which showed that gross domestic product had risen 2.2 percent in 2002, recovering from a 2.4-percent contraction the previous year. In the fourth quarter, the economy grew 0.4 percent over the previous quarter, after a 6.6-percent decline in the prior quarter. The economy grew 3 percent in the fourth quarter on an annual basis, beating earlier government projections of a 2.6-percent growth.

In fact, MTI clarified that annual growth of 2.2 percent would have been higher if it had not been for a re-basing of data done in January, which are now using 1995 instead of 1990. This had the effect of lowering the overall data by 0.3 percentage points, MTI said.

The government maintained its growth forecast of 2 to 5 percent for 2003.

Last year, growth was propelled by the manufacturing sector, which expanded 8.3 percent, after a 12-percent decline in 2001, and Wu said this trend was likely to continue this year.

This was largely attributed to a 40-percent surge in the chemicals and chemical products industry. The electronics industry also turned around, expanding 4.1 percent last year, after a 21-percent plunge in 2001. But the construction sector deteriorated further, shrinking 11 percent after a 3.2-percent decline in 2001.

The ministry said the consumer price index was down 0.4 percent in 2002.

Meanwhile, the composite leading indicator, a barometer of business activity over the next nine months, rose 1.5 percent in the fourth quarter over the third quarter.

Total employment declined by 39,500 in 2002, after posting a gain of 100 in the previous year, reflecting mainly a fall in the construction sector. As a result the average unemployment rate rose to 4.4 percent from 3.3 percent in 2001, though there was an improvement in the fourth quarter. However, officials warned the jobless rate could worsen beyond 5.5 percent this year if the global economic situation worsens.

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