Singapore: Full Year Contraction of 2.1% in 2009

Singapore has pulled through a difficult year.GDP growth for the fourth quarter was 3.5 per cent year-on-year, which means a 2.1 per cent contraction in GDP for the full year of 2009.

This compares with the slight 1.5 per cent GDP growth recorded in 2008, and comes in at the lower end of the government’s forecast of a 2 to 2.5 per cent decline in 2009’s GDP.

“Our economy is growing again, and has recovered much of the ground since the recession began last year,” said Premier Lee Hsien Loong in his New Year message yesterday evening.

This, he said, was achieved by both government programmes such as SPUR, Jobs Credit and the Special Risk-Sharing Initiative.

And, unions, employers, grassroots and community organizations played critical roles in keeping unemployment under control, or helping retrenched workers.

For 2010, the government expects the economy to expand by between 3 and 5 per cent. With the improved outlook, special measures such as Jobs Credit and the risk-sharing scheme are gradually being phased out.

Outlining major investments in capabilities and infrastructure, such as the two integrated resorts, extended MRT lines and new HDB townships, as well as the two new tertiary institutions, Lee said that Singapore “must also address our growth constraints” as physical limits tighten.

“We must therefore shift gears, to grow by qualitative improvement: transforming the economy, developing skills and growing talent, both our own and from abroad,” he said. This means local enterprises need to “innovate relentlessly and build the capabilities to grow into world-beating companies”, while workers too must keep upgrading their skills and remain flexible even though job prospects have now improved.

It looks like Singapore is slowly turning around on the home stretch.

I believe Singapore can do it.