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Singapore could lose a total of 99,000 jobs during the current recession, with more than half of the cuts in the key manufacturing sector, an analysis by local bank DBS said.
“There will be a net loss of about 99,000 jobs due to the current recession and we also expect this to stretch into 2010”, the bank said in its report.
Unemployment is likely to hit 4.8 per cent this year and peak at 5 per cent by the middle of 2010, it said.
“Labour markets are expected to deteriorate further,” DBS added.
“The manufacturing sector is expected to be the worst hit with job losses of about 58,000 as the global recession chokes up demand for our manufactured exports.”
The bulk of output from Singapore’s manufacturing sector ends up as exports to the world’s major economies, but recessions in those markets have severely affected local factories.
DBS said it has also downgraded its growth outlook for the city-state to a contraction of 4.8 percent this year from 3.8 per cent previously, due to the “sharp collapse in global demand and export sales.”
An “aggressive” stimulus package totalling 20.5 billion Singapore dollars ($20 billion) will only cushion the blows from the recession, the bank said.
Latest official data in Singapore said the seasonally adjusted unemployment rate rose to 2.6 per cent in December, and companies laid off 7000 workers during the last three months of 2008.
Singapore’s worst recession occurred in 1964, just before independence, when the economy shrank 3.8 per cent.