SINGAPORE (AP) -- Singapore analysts slashed forecasts for 2009 economic growth -- and now expect a severe recession -- as the global slowdown hurts demand for the city-state's exports.
The country's gross domestic product will likely shrink 4.9 percent this year, according to the median forecast of 20 economists in a quarterly survey released by the central bank Monday.
But they expect a recovery by 2010, when the economy is seen expanding 3.3 percent.
In the previous survey in December, analysts had expected the economy to contract 1 percent this year.
Analyst expectations for this year have worsened in almost every GDP category. They foresee manufacturing falling 10.3 percent in 2009, financial services dropping 7.7 percent and wholesale and retail trade down 5.6 percent.
Construction, buoyed by a $13 billion government stimulus package announced in January, is the only sector analysts expect to grow this year, up 8.2 percent.
Analysts said the economy will likely shrink 8.5 percent in the first quarter from a year earlier, down from their 3.4 percent forecast in December, said the central bank, known as the Monetary Authority of Singapore.
Non-oil exports, which account for about two-thirds of GDP, plummeted 35 percent in January as demand from the U.S, Europe and Japan dried up. Analysts expect non-oil exports to fall 17.5 percent this year, down from a forecast of a 9.0 percent drop in the previous survey.
The economy fell a seasonally adjusted, annualized 16.4 percent in the fourth quarter from the previous quarter. The government expects the economy to contract between 2 percent and 5 percent this year.
The inflation rate will likely decrease to 0.2 percent this year from 6.5 percent last year while the unemployment rate jumps to 4.4 percent from 2.6 percent, according to the analyst survey.