UPDATE 1-Singapore may avoid recession despite Q4 GDP decline

* Q4 GDP -2.5 pct q/q, better than flash estimate of -2.9
pct
* Govt reiterates 1-3 pct growth forecast for 2012
* Says near-term indicators don't point to recession in Q1

By Kevin Lim and Charmian Kok
SINGAPORE, Feb 16 (Reuters) - Singapore said on
Thursday it may avoid a recession despite the weak global
economic outlook, after data showed the economy contracted less
than expected in the last quarter of 2011 despite persistent
weakness in electronics.
"The first month of trade numbers, export numbers are quite
good," Thia Jang Ping, a director at the Ministry of Trade and
Industry, told a news conference.
"It's still too early to call, but our near-term indicators
do not suggest an imminent danger of Singapore slipping very
badly into a recession in the first quarter," he added.
The economy shrank 2.5 percent in the fourth quarter from
the preceding period on an annualised and seasonally adjusted
basis, data showed on Thursday.
The GDP data was better than an advance flash estimate of a
2.9 percent contraction, but worse than the median estimate for
a 2.3 percent decline by economists polled by Reuters.
From a year earlier, gross domestic product grew 3.6
percent.
Singapore stocks and currency weakened on
Thursday although that was in line with the regional trend, with
sentiment hit by a another delay in cementing a bailout package
for Greece.
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For a graphic on Singapore GDP, inflation and non-oil exports:
link.reuters.com/mek66s
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TEPID GROWTH THIS YEAR
Singapore expects its economy to grow by 1-3 percent in
2012, down from last year's revised expansion of 4.9 percent,
although it warned of risks to the forecast.
Asia is suffering the effects of slowing demand in the West,
and the International Monetary Fund (IMF) last month warned that
Europe's debt crisis could tip the world economy into recession.

A recession is often defined as two consecutive quarters of
contraction, and Singapore, whose trade is three times GDP,
tends to feel the chills from a deterioration in global economic
conditions faster than most countries.
"Specifically, a disorderly sovereign default in the
Eurozone could precipitate a global financial crisis, while an
escalation of geopolitical tension in the Middle East could
trigger a global oil price shock," Singapore's trade ministry
said in a statement.
On Wednesday, South Korea said January exports fell 7
percent from a year ago in the biggest annual decline since
October 2009, while Australia said its leading index of
employment dropped in February in a sign that jobs growth could
fall.

TRADE, PROPERTY
Singapore also said on Thursday its trade and non-oil
domestic exports are expected to grow by 3 to 5 percent this
year, down from a rise of 8 percent and 2.2 percent,
respectively, in 2011.
Wu Kun Lung, an economist at Credit Suisse, said electronics
manufacturing, which led the decline in Singapore's fourth
quarter GDP, has probably bottomed and could recover later this
year.
"The biggest positive we've seen so far this year is the
pick-up in global PMI (purchasing managers' index). We've seen
significant improvement in many parts of the world, especially
in the U.S.," he said.
Electronics makes up for 31 percent of Singapore's
manufacturing sector, which in turn accounts for about
one-quarter of its GDP. The sector contracted a seasonally
adjusted and annualised 11.1 percent in October-December.
Singapore officials did not appear overly concerned about
the bubbly residential property market, even though private home
sales tripled in January from December, when sales fell in
response to new cooling measures.
"Essentially there is still some tightness. But with the new
supply that's coming in, some of that tightness will ease over
the course of the year," said Ow Foong Pheng, the trade
ministry's permanent secretary.
Unlike in China and Hong Kong where government measures have
succeeded in cooling the real estate market, sales of
residential property in Singapore have remained strong due to
low interest rates and a surge in interest from foreign buyers.
"The government will still keep a watch on the property
market. One month doesn't make a trend so in terms of policy
formulation, they probably want to wait a few more months," said
Barclays economist Leong Wai Ho.

(Additional reporting by Saeed Azhar, Eveline Danubrata, Harry
Suhartono and Mark Tay; Editing by Kim Coghill)