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Singapore Infrastructure Report Q3 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: June 2009 Product Code: R302-6552 Description With an economy heavily reliant on exports, Singapore has taken a severe pounding as a result of theglobal slowdown. Advance estimates by the Ministry of Trade and Industry (MTI) indicate that theeconomy shrank by an alarming 11.5% y-o-y in Q109, far worse than the 4.2% contraction registered inQ408. This was largely due to double-digit declines in exports in the first three months of 2009. BMIholds a bearish -7.2% GDP forecast for 2009 as we do not foresee any positive catalyst over the mediumterm that may boost economic output.The latest data released by the Singapore government indicates that the construction industry is showingresilience in the face of recession. BMI has revised its forecast up from -8.1% to -6.5% y-o-y in 2009, butnegative growth is expected to persist to 2010. Overall the sector is seen as robust, particularly since itsaw exceptional growth of 20% in a very difficult 2008. For Singapore’s economy as a whole, however, BMI predicts that 2009 will be tough. Positive pointssuch as the government’s strong stimulus plan and the island’s excellent business environment ratingsmay provide risks to the upside, but the full effects of the recession have yet to be felt. Singapore willspend SGD18-20bn (US$12-13bn) on infrastructure development in 2009, according to Grace Fu HaiYien, senior minister of state for national development. The move is planned to help stimulate growth inthe current economic downturn, and better prepare the country for when growth resumes in the region. In2009, the funds will be allocated to roads, public housing and other social infrastructure, as well as a newinternational cruise liner terminal at Marina South. Singapore also plans to continue to invest in infrastructure over the longer term, committing SGD15-17bn(US$10-11bn) per year in 2010 and 2011. The move is in addition to a SGD20.5bn (US$13.6) stimuluspackage announced in January 2009, which included SGD4.4bn (US$3bn) for infrastructure spending.There has also been the announcement of an extensive SGD1bn green energy investment programme toposition Singapore as a regional hub of expertise. Overall, BMI is more upbeat on Singapore's longer-term growth prospects to 2018, forecasting a mildrecovery from 2010 before a full recovery in 2011, with real GDP forecast to expand at a rate of around4.0% out to 2018. Key supporting factors will be the government's sound economic policy, a highlyskilled workforce, a superior business environment and financial services industry, and the city-state'sstrategic location in Asia. Key constraints include the economy's reliance on its external sector, as well asSingapore's ageing demographic profile. Table of Contents
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