Singapore’s economy contracted 6.5% in the first half of 2009 from a year earlier, according to Prime Minister Lee Hsien Loong.

In a televised National Day message, Loong said: “We are now in a stronger position.” The decline in the first six months was “less bad than we had feared” after an easing in the global recession and Government measures helped Singapore’s economy “bounce back” last quarter.

Singapore’s gross domestic product (GDP) will shrink between 4-6% in 2009, according to Loong, reiterating a July forecast that the contraction will be less than an earlier prediction of as much as 9%.

In Q2 2009, Singapore’s economy grew an annualised 20.4% from the previous three months, according to initial Government estimates released on 14th July.