Left Menu
Development News Edition

UPDATE 2-Singapore slashes 2019 GDP forecast as global risks expand

Reuters | Singapore | Updated: 13-08-2019 07:37 IST | Created: 13-08-2019 07:36 IST
UPDATE 2-Singapore slashes 2019 GDP forecast as global risks expand
Image Credit: ANI

Singapore slashed its full-year economic growth forecast on Tuesday as global conditions were seen worsening and data confirmed the slowest growth rate in a decade amid mounting fears of a recession in the city-state.

The government cut its forecast range for the gross domestic product in Singapore - often seen as a bellwether for global growth because international trade dwarfs its domestic economy - to zero to 1% from its previous 1.5%-2.5% projection. Singapore's downgrade adds to concerns globally about the effect of increasing protectionism on exports and production. The deterioration in the global outlook has pushed central banks to cut interest rates and consider unconventional stimulus to shield their economies.

"Looking ahead, GDP growth in many of Singapore's key final demand markets in the second half of 2019 is expected to slow from, or remain similar to, that recorded in the first half," the trade ministry said in a statement on Tuesday. The ministry flagged a host of growing economic risks including Hong Kong's political situation, the Japan-Korea trade dispute, the Sino-U.S. tariff war, slowing growth in China and Brexit.

Final second quarter GDP data on Tuesday showed a 3.3% on-quarter contraction on a seasonally-adjusted annualized basis, slightly smaller than the 3.4% decline seen in the government's advance estimate but lower than a 2.9% fall predicted in a Reuters poll. Tuesday's data also confirmed annual GDP expanded 0.1% in April-June from a year earlier, its slowest rate in a decade, and below poll expectations of 0.2%.

Singapore's benchmark stock index fell 1.2% in early trade, underperforming other bourses in the region. A central bank official said after the data that it was not considering an off-cycle policy meeting. The next of its scheduled semi-annual meetings is in October when it is widely expected to ease policy.

Singapore has been hit hard by the Sino-U.S. trade war, which has disrupted world supply chains in a blow to business investment and corporate profits. "Obviously, it feels like the storm is coming if you look at the whole macroeconomic fundamentals softening," said Selena Ling, head of treasury and strategy at OCBC Bank.

"All the downside risks are piling up one side," Ling added, pointing to the myriad of global risks flagged in the trade ministry statement. New Zealand, India, and Thailand all cut interest rates last week, signaling major concerns about the outlook for economic growth. Last month, the U.S. Federal Reserve cut interest rates for the first time since 2008.

Analysts at Credit Suisse said in a note titled "a recession is coming" last week they expect Singapore to enter a technical recession in the third quarter, defined as two sequential periods of on-quarter contraction. A faltering economy is expected to crimp growth at Singapore's three local listed banks, which have so far benefited from improved margins, steady interest rates, and loan growth. Singapore Prime Minister Lee Hsien Loong said in an annual speech last week that the government stood ready to stimulate the economy.

Also Read: Singapore's GIC to invest up to Rs 4,400 cr in IRB Infra


TRENDING

OPINION / BLOG / INTERVIEW

Pandemic must be impetus, not obstacle, for clean water access

To make matters worse, there are suspicions that the inadequacy of wastewater treatment methods in California, the rest of the USA, and indeed around the world may help to propagate the disease even more widely. ...

3D printing and the future of manufacturing post COVID-19

The on-demand, customizable, and localized manufacturing of product components facilitated by 3D printing has the potential to redefine manufacturing but there are certain technical, mechanical, and legal limitations that, unless ...

How UK’s 'best prepared' healthcare system failed to gauge COVID-19

The UK is proud of their public health system and its unlike any other country as around 90 percent of British public supports the founding principles of National Health Service. But without accurate data being available to stakeholders in ...

Poor on IHR capacity progress in 2019, WHO says Cambodia tops COVID-19 response

Despite being in proximity to Hubei, the original epicenter of COVID-19 pandemic, Cambodia has reported just 226 confirmed cases and zero deaths. After seeing the data, WHO appreciated Cambodias healthcare information system but experts dou...

Videos

Latest News

Andaman and Nicobar strategically imp, will play important role in self-reliant India campaign: PM

Noting the Andaman and Nicobar Islands are strategically located for trade, Prime Minister Narendra Modi said on Sunday the region is going to be developed as a maritime and startup hub and highlighting his governments development initiativ...

Oppn alleges 'discrimination' in awarding solatium to kin of

The Opposition Congress and BJP in Kerala Sunday trained their guns on Chief Minister Pinarayi Vijayan over the discrimination in awarding solatium to the victims of landslide and aircraft crash and his failure to visit those affected in Id...

India dismisses controversy over Jaishankar's remarks on Buddha

India on Sunday dismissed the controversy over the birthplace of Gautam Buddha, saying External Affairs Minister S Jaishankars remarks on him was about our shared Buddhist heritage and theres no doubt that the founder of Buddhism was born i...

Nitish Kumar plants sapling on 'Bihar Prithvi Diwas'

On the occasion of Bihar Prithvi Diwas, Chief Minister Nitish Kumar on Sunday planted a sapling of Patli tree in the state capital for environmental protection through plantation drive. The exercise, which began on World Environment Day on ...

Give Feedback