A picturesque view of Singapore’s Central Business District and the iconic Merlion illuminated with a stunning projection during the iLight Marina Bay event in March 2018.
Suhaimi Abdullah | Getty Images News | Getty Images
Singapore has revised its economic growth forecast for this year, projecting a range of 0.5% to 1.5%. The adjustment is attributed to sluggish external demand amidst a weak global economy.
The Ministry of Trade and Industry announced the revised forecast, which was narrowed from the previous estimate of 0.5% to 2.5%.
In the second quarter of this year, Singapore’s gross domestic product grew by 0.5% year-on-year. However, it fell short of the government’s advance estimate of 0.7% revealed in July.
The ministry stated, “Singapore’s external demand outlook for the rest of the year remains weak.” Read the official statement for more details.
On a quarter-on-quarter seasonally adjusted basis, Singapore’s economy experienced marginal growth of 0.1%. This marks a reversal from the 0.4% contraction in the previous quarter, narrowly avoiding a technical recession.
The exports-led manufacturing sector in Singapore contracted by 7.3% year-on-year in the April-June period, worsening from the 5.4% contraction in the previous quarter.
The ministry noted, “Apart from the expected slowdown in Singapore’s key external demand markets, the global electronics downturn is also likely to be protracted, with a gradual recovery expected towards the end of the year at the earliest.”
Global Downside Risks
The ministry emphasized that manufacturing output is likely to be affected by contractions in the electronics and precision engineering clusters due to the global electronics downturn.
Growth in the finance and insurance sector is also expected to be sluggish, influenced by the continued weakness in the external economic situation and tight financial conditions.
The government acknowledged the presence of downside risks in the global economy and stated that the “outlook for the rest of the year remains tepid.”
These risks include the possibility of more persistent inflation in advanced economies, which could result in tighter global financial conditions and a reduction in global spending.
The ministry also highlighted the risk of escalations in the war in Ukraine and geopolitical tensions among major global powers, potentially leading to “renewed supply disruptions, dampened consumer and business confidence, as well as a negative impact on global trade.”
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