Singapore will be Southeast Asia’s weakest economy, shrinking nearly 5 per cent this year, while Thailand faces its worst recession in 11 years, reflecting a collapse in exports across Asia, a Reuters poll shows.
The Philippines and Indonesia will be the only economies in Southeast Asia to record growth this year but that growth will be sharply slower than in previous years with Indonesia hit by falling prices of commodities, the bulk of its exports.
Singapore’s gross domestic product, or the value of all goods and services produced, is set to shrink 4.9 per cent in 2009, according to the median forecast of the Reuters quarterly poll.
It would be the city-state’s worst-ever economic slump and mark a sharp a turnaround after averaging 6.4 per cent annual growth over the past five years. But analysts foresee it rebounding 3.9 per cent in 2010 as fiscal stimulus kicks in.
In contrast, Southeast Asia’s biggest economy, Indonesia, is poised to expand by 4 per cent this year, and 5.1 per cent in 2010, as exports contribute only about a third of GDP, making it much less dependent on trade than its neighbours.
Still, the growth forecast is well down from a 4.8 per cent estimate in a poll three months ago. Weak exports and falling commodities prices weigh on growth, and analysts said the government needs to take further steps to support the economy on top of last month’s US$6.1 billion (S$9.31 billion) fiscal stimulus package.
In Malaysia and Thailand, demand is hurt by crumbling exports. Thailand’s economy is set to shrink 1.5 per cent this year while Malaysia will see a 1.2 per cent contraction. The poll forecast Malaysia would pick up slightly next year, with GDP growing 2.8 per cent while Thailand is set for a 2.9 per cent expansion in 2010.
The forecast that the economy will shrink 1.5 per cent this year reverses a 2.8 per cent growth forecast three months ago and an actual 2.6 per cent expansion in 2008.
For the Philippines, the poll forecast the economy to expand by just 2.3 per cent this year, lower than a 3.3 per cent growth estimate in a similar poll in December and below government expectations for at least 3.7 per cent growth, as a deepening global recession chokes exports and slows remittance inflows.