Drawing from selected leading indicators that appear to signal a turning point, assistant professor Choy Keen Meng is predicting that Singapore's recession will bottom out in the first quarter and turn the corner by the end of the year.

He expects the economy to shrink by 4 per cent this year, a forecast that is more optimistic than most. Some private sector economists have predicted a decline as severe as minus 10 per cent growth.

'The leading indicators suggest that the worst will be in the first quarter and we will see improvements in the second and third quarters,' he said.

One of the key indicators is the United States' purchasing managers' index, which rebounded in January and February after seeing a steep plunge towards the end of last year. This index is a forward-looking signal of manufacturing output in the US.

Other indicators used include the Straits Times Index, business expectations surveys, as well as the amount of non-oil cargo loaded and discharged at Singapore's sea ports.

'Some of these indicators are showing signs of improvement, and while others are declining, the declines have moderated,' he said.