ENG-2009 — Page 83

The Economy | 39

more notable towards the end of the year, with merchandise exports resuming year-on-year growth in November and December, reflecting some normalisation of global trade after a period of exceptionally large fall-off.

Chart 1

Quarterly Gross Domestic Product

Year-on-year rate of change (Per cent)

20

18

16

14

Nominal GDP

Real GDP

12

10

8

6

4

2

-4

-6

0246

-2

-8

-10

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

In comparison, exports of services fared persistently better in 2009. Indeed, all the major categories of exports of services reverted to year-on-year growth in real terms by the fourth quarter of the year. Inbound tourism showed solid growth during most of the year, except for a brief setback around mid-2009 due to concern about the spread of human swine flu.

Exports of financial and other business services plummeted in the first half of the year in the aftermath of the global financial breakdown, but showed a visible turnaround in the rest of the year as financial market activities revived and business. activities gradually recovered. Merchanting and other trade-related services (mainly offshore trade), and to some extent exports of transportation services, were sluggish during most of 2009, reflecting the plunge in global trade flows in early 2009 and their subsequent slow recovery.

The Government's strategy of 'stabilising the financial sector, supporting enterprises and preserving employment' helped to cushion the economy from the aftershock of the financial crisis and to maintain confidence. The stabilising effect was particularly evident in the domestic sector. Apart from a manifest contraction. in the first quarter, private consumption demand actually strengthened from the second quarter. For 2009 as a whole, private consumption expenditure (PCE) dipped only 0.3 per cent in real terms. Overall investment spending likewise showed a sharp improvement in the second half of 2009. Under the Government's commitment to expedite public sector projects to counter the financial tsunami, public sector building and construction works accelerated markedly during the year. With the