Singapore economy

GDP 2001 -2% GDP 2000 +10.3% Manufacturing 2001 -12% Manufacturing 2000 +15%

This is the worst performance since independence in 1965 and stands in stark contrast to the robust growth of 10.3% recorded the previous year.

Singapore's economy is driven by exports and has been especially hard hit by the global economic slowdown.

"External demand was the major drag on growth, hit by weaker global economic conditions and persistent electronics slump," the trade ministry said in a statement.

Recovery hopes

Despite the weak data, there are signs that the worst is over and that a recovery is already on the way.

During the last three months of the year, the economy shrank 6.6% - a better performance than had been expected.

And the government is forecasting that things will pick up by the second half of the year, pulling the economy back into positive territory for the year as a whole.

Improvements in the state of the global economy are expected to lead to a 1-3% expansion in Singapore during 2002.

On Wednesday, chairman of the Federal Reserve Alan Greenspan forecast growth of 2.5-3% during 2002 in the US, Singapore's prime export market.

Jobless fears

But unemployment - which is already at a 15-year high - is set to worsen, the government warned.

Minister of State for Manpower Ng Eng Hen has warned the jobless rate may hit 6% before the economy recovers.

The poor performance of 2001 is basically down to the manufacturing sector.

Manufacturing, the engine-room of Singapore's economy, contracted by 12% compared to growth of 15% in 2000.

But the latest figures for January ended nine consecutive months of decline in the sector.