Singapore Economy May Shrink by Record as Trade Falls

The economy may contract 6 percent to 9 percent, the trade ministry said in a statement today, reducing its forecast for the third time since early January. The government previously predicted a decline of as much as 5 percent.

The central bank said it would adjust the trading range for the Singapore dollar, effectively lowering the band for the first time since 2003 to revive growth. Singapore stocks fell after exports tumbled for an 11th month amid a slump that’s forced Chartered Semiconductor Manufacturing Ltd. to fire workers and the government to reduce taxes and subsidize jobs.

“The situation is really dire and the central bank’s policy will improve sentiment and help the economy,” said Vishnu Varathan, an economist at Forecast Singapore Pte. The policy move “gives them the flexibility to weaken the currency now, and steer it to strengthen when things get better.”