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After a tumultuous year, it seems there are many reasons for us to feel optimistic in 2010. INVEST speaks with several industry watchers to find out more about the factors which should help transform Singapore's economic fortunes over the next 12 months. At the same time, what are the other factors which could hinder our recovery process?

It was an announcement Singaporeans had anticipated for a few months: "The recession in Singapore is over," Mr Ravi Menon, the permanent secretary with the Ministry of Trade and Industry (MTI), said at a media briefing in mid November.

The announcement in itself did not surprise observers. After all, hopes had been raised among many market watchers and economists that the worst of the crisis was indeed over as early as August when the MTI revealed that the economy grew 20.7 per cent in the second quarter of 2009.

The "declaration", which was accompanied by the ministry's growth forecast for 2010, however serves as an official confirmation of what most of us already believe: Our economic fortunes can only turn for the better from now on.

In late October, the International Monetary Fund (IMF) upgraded its growth outlook for Singapore: It forecasts Singapore's gross domestic product (GDP) to decline 1.7 per cent this year, up from an initial prediction of a 3.3 per cent contraction. The IMF also raised Singapore's growth for next year to 4.3 per cent, up from the earlier estimate of 4.1 per cent.

Three weeks later, the MTI announced its estimate of a 3 to 5 per cent growth in 2010 while maintaining its forecast for 2009 at -2.5 to -2.0 per cent. Earlier in November, Prime Minister Lee Hsien Loong said he does not expect another dip in Singapore's economy.

Observers whom INVEST spoke to are equally upbeat on the city-state's growth prospects.

Mr David Cohen, Director of Asian Economic Forecasting, Action Economics, in fact projects a slightly higher annual growth of -1.5 per cent in 2009 followed by a +5.5 per cent in 2010. "It assumes that the global economy will remain on a positive trajectory, continued recovery in the US and Europe, even if fairly restrained. In that environment, Singapore should be able to continue positive q/q growth, though slower than the past two quarters, or the average during the few years before the global crisis," he said.

Sharing similar bullish sentiments on the state of our economy, Ms Sulian Tan-Wijaya, Senior Director, Retail & Lifestyle, Savills Singapore, noted: "Other than the buoyant stock and property markets in Singapore, many other industries - such as banks - have also performed well over the past few months."

Other market watchers prefer to take a more cautious view.

"My guess is that, barring any significant shifts in the global economy or in global politics, Singapore's economy should hum quite comfortably at between 3 and 4.5 per cent in 2010," said Mr Eugene Tan, Assistant Professor of Law at Singapore Management University. "All said, the time is not quite ripe to be bullish but we can be cautiously optimistic," he quickly added.

Mr Robson Lee, a partner in law firm Shook Lin & Bok, also prefers to maintain a cautious outlook for Singapore for the "next six months". "It is not clear if the economic recovery in Singapore is sufficiently wide spread to maintain the growth momentum. While the property sector has become very hot, sectors such as electronics and manufacturing have nose-dived," he said. At the same time, Singapore's growth is fundamentally intertwined with the Asia Pacific region. "Any adverse development which impacts on major economies like the United States, China and Japan is likely to have a major knock-on effect on Singapore's economy," Mr Lee added.