Where is the Singapore economy headed?

The International Monetary Fund (IMF) recently forecast a dire immediate future for the Singapore economy. But others disagree. We analyse the arguments.

Source: The Straits Times, 7/5/9, p.B15
Headline: Singapore economy may shrink 10%: IMF
Writer: By Fiona Chan

Quote1
The IMF has slashed its forecast for Singapore's growth this year, saying the economy could decline 10 percent to end up as the worst performer in Asia. ... These dire forecasts were released in the IMF's latest regional economic outlook, launched yesterday at the MAS Building. ... Singapore saw the biggest downward revision, said IMF representative Joshua Felman: ...
"If you look around the region, what you see is the countries that have been hit hardest in the crisis have two characteristics: They are the most open economies and they are the ones that specialise in manufacturing. ... Singapore fits well under both categories, and that's why we expect that the decline in output this year is really going to be quite sizeable." ...

Comment1
This is an example of J S Mill's Method of Agreement. Several instances of the phenomenon (hard hit economy) are examined for preceding factors. Common factors are identified: (open economy) and (manufacturing). These are claimed to be the causes. Singapore has both factors. Hence, Singapore will have the effect (hard hit economy).

Quote2
Dr Chua Hak Bin of Citigroup, who spoke in a panel discussion at the IMF event, ... noted that Asia's historical experience has shown that recessions tend to be followed by V-shaped recoveries, especially in small open economies such as Hong Kong and Singapore.

Comment2
This is an inductive argument:

Reason: In the past, recessions followed by V recoveries (esp. in small, open economies)
Conclusion: Hence, this recession will be followed by V recovery.

Note that this conclusion does not contradict the conclusion in Comment1. It is logically possible for a hard hit economy to have a V-shaped recovery.

Quote3
Citigroup economist Kit Wei Zheng, who was also at yesterday's launch, said ... "The IMF forecast does not seem to square with the indicators that we are seeing, including the fact that exports are rebounding quite smartly in month-on-month terms."

Comment3
We complete the argument:

Premiss1: Exports rebound month-on-month
Premiss2: If (exports rebound month-on-month), then (not-(hard hit economy)) [suppressed]
Conclusion: Hence, (not-(hard hit economy))

This conclusion does contradict the conclusion in Comment1. The question lies with Premiss2: How much of a rebound is needed to bring about the consequence of (not-(hard hit economy))?

Source: The Straits Times, 7/5/9, p.B15
Headline: Economy's openness 'to ensure quicker rebound'
Writer: By Robin Chan

Quote4
But this openness will mean a quicker rebound when a global recovery kicks in, Monetary Authority of Singapore's (MAS) deputy managing director Ong Chong Tee told a business seminar yesterday at the Ritz-Carlton Millenia. This openness and trade dependency makes the economy "more susceptible to global headwinds."

Comment4
This returns us to the argument in Comment1. It wants to revise Premiss1 to:

If (open economy), then (greater susceptibility)

This would allow a hard hit economy to have a V-shaped recovery -- provided the rest of the world recovers first.