EXPLAINING THE GREATER IMPACT OF TRADE ON GDP: COMPARISON WITH THE 2001 RECESSION

Fluctuations in Singapore’s real GDP are closely correlated to changes in trade figures, because of Singapore’s nature as an externally-oriented and open economy. In the first quarter of 2009, nominal trade fell by a sharp 24 per cent. Although this decline was similar to the decline experienced at the bottom of the 2001 recession (-21 per cent), the decline in real GDP in the first quarter of 2009 (-10 per cent) was more severe than its corresponding decline in 2001 (-6.4 per cent) (Exhibit 1).

Click here for the full article.