NO ONE is claiming that the economy is in turnaround but the better than expected growth numbers out on Thursday have reinforced hopes that the worst may be over.

The manufacturing and financial services sectors both put in better-than-expected displays in the first quarter to help the overall economy lift its pulse rate a fraction and likely do away with the need for another government stimulus package.

Gross domestic product (GDP) contracted by 10.1 per cent relative to the same period last year. That is the worst quarter on record but better than the Government's advance estimate last month of an 11.5 per cent plunge.

GDP fell 14.6 per cent in the first three months compared with the previous quarter. This was also better than the 19.7 per cent plunge in last month's estimates.

But it did mark the fourth straight quarter-on-quarter slump, something not seen since the Asian financial crisis. All sectors, except for financial services and construction, showed a slump in the first three months from the previous quarter.

While it sounds dispiriting, the Ministry of Trade and Industry (MTI) said the labour market, asset market and corporate sector have shown signs of resilience despite the recession.

'We've probably seen the bottom,' MTI Second Permanent Secretary Ravi Menon said on Thursday. 'There's a shift of sentiment that things have stopped getting worse compared to three months ago...and we subscribe to that view too.'

The MTI has maintained its full-year economic forecast range of a -6 per cent to -9 per cent contraction that it made last month. It noted that since then, there have been 'no new major' systemic risks to the world economy apart from the Influenza A (H1N1) outbreak.

The latest data presented 'a less pessimistic picture' compared with the advance estimates, it said.

However, Mr Menon said it was not clear whether the economy is going to see a 'decisive rebound' due to 'mixed signals'. 'There are 'green shoots' as well as 'brown weeds',' he noted.

Read the full story in The Straits Times today.

alfoo@sph.com.sg