See More on Facebook

Economics

Singapore growth lowest in decade

Singapore economy grows just 0,1%, is worse than expected.


Written by

Updated: July 12, 2019

Singapore’s economy performed worse than expected in the second quarter, slowing again after hitting its lowest rate since the global financial crisis in the first three months of this year.

Flash estimates by the Ministry of Trade and Industry (MTI) pegged Singapore’s economic growth at 0.1 per cent in the second quarter this year, much below analysts’ expectations of 1.1 per cent according to a Bloomberg forecast.

This is the lowest growth since the economy contracted by 1.2 per cent in the second quarter of 2009 during the Great Recession.

It is also a far cry from the revised 1.1 per cent growth in the previous quarter and marks the sixth straight quarter of easing.

On a quarter-on-quarter seasonally-adjusted annualised basis, the economy shrank by 3.4 per cent, after posting growth of 3.8 per cent in the preceding three months.

Economists said the latest figures showed weakness across key sectors, with all contracting from the first quarter of the year.

Manufacturing shrank 6 per cent from the previous quarter, while construction contracted by 7.6 per cent and services, by 1.5 per cent.

Both construction and services had reversed their previous quarter-on-quarter growth.

Ms Selena Ling, head of treasury research and strategy at OCBC Bank, told The Straits Times: “It does look like the risk of a technical recession is growing by the day.”

A technical recession is defined by two consecutive quarters of slowdown.

“It’s not just a manufacturing story, which we know can evolve quite rapidly with United States President Donald Trump’s tweets,” she said.

But she added “we are not that hopeful on trade either”, noting that President Trump tweeted overnight on how China was letting the US down by not buying the agricultural products that they said they would.

An area of concern is how the latest slowdown could hit the labour market, said Ms Ling.

There is an “emerging softening” in services, suggesting consumer confidence may be dented and people are tightening their purse strings.

Policymakers here are already reviewing their 1.5 per cent to 2.5 per cent growth forecast for the year, as simmering trade tensions between the United States and China hit investments, trade and manufacturing, said Monetary Authority of Singapore chief Ravi Menon last month.

While Maybank Kim Eng Research warned earlier that the country’s economy will likely experience a “shallow technical recession” in the third quarter with a worsening of the global trade outlook, Maybank economist Chua Hak Bin said the latest figures suggest “the risk has shifted towards a deeper (technical) recession.”

He added that a new lower range of 0.5 per cent to 1.5 per cent for full-year growth is looking more probable, adding that MTI will likely further downgrade forecast.

In the case of a deeper technical recession, he added, employment growth will likely slow further and retrenchments in manufacturing and trade-related services will likely worsen.

Lacklustre performance by the manufacturing sector dragged growth in the second quarter, even as construction continued its recovery and services grew compared to a year ago.

MTI’s latest figures showed that manufacturing contracted by 3.8 per cent year-on-year in the second quarter, extending its 0.4 per cent decline previously.

“The contraction was due to output declines in the electronics and precision engineering clusters, which more than offset output expansions in the rest of the manufacturing clusters,” it said.

Manufacturing took a larger hit than expected, and Dr Chua flagged further risks such as the broadening of the US-China trade war to export controls, which threatens to worsen disruption to supply chains.

“Unless there is a quick resolution to the trade war, manufacturing will likely continue to contract in the third quarter,” he said.

Construction grew by 2.2 per cent, extending its 2.7 per cent growth previously, supported by an increase in public sector construction activities.

The services producing industries expanded by 1.2 per cent year-on-year, unchanged from the previous quarter, helped by the finance & insurance, “other services industries” and information & communications sectors.

In spite of the gloomy figures, DBS senior economist Irvin Seah, pointed out that “advance figures tend to get revised up”, and the forecast on services is generally more conservative.

“With such a deep drop in the second quarter, chance of a positive sequential growth in the third quarter will be higher too,” he said.



Enjoyed this story? Share it.


About the Author: The Straits Times is Singapore's top-selling newspaper.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Economics

China, US in constant touch to resolve trade issues

China and the United States are in constant touch to resolve pending trade and economic issues, the Ministry of Commerce said on Thursday. The comment came ahead of Sunday’s US deadline for another scheduled round of tariff increases on Chinese imports worth almost $160 billion. If a trade deal is not struck by Sunday, computer monitors and toys will be among the Chinese export items likely to be affected. Gao Feng, a ministry spokesman, said the Customs Tariff Commission of the State Council has already worked out tariff exemptions on some soybean, pork and other products shipped from the US — the latest sign of tensions easing in the protracted trade conflict. The US seems to resort to brinkmanship by using a tariff deadline to pressure China in the ongoing trade talks for a phase one, preliminary deal, said Chen Wenling, chief economist at the China Center for International Economic Exchanges


By China Daily
December 13, 2019

Economics

Report: US officials lied about Afghanistan

Civilian, military officials misled public for nearly two decades about status of war, Washington Post review of documents finds. For nearly two decades, senior US civilian and military officials didn’t tell the truth about the war in Afghanistan, The Washington Post reported on Monday after reviewing more than 2,000 pages of government documents. The officials made pronouncements they knew to be false and hid evidence that the war had become unwinnable, the newspaper said interviews with those officials show. John Sopko, the head of the federal agency that conducted the interviews, acknowledged to the Post that the documents show “the American people have constantly been lied to”. The newspaper said that two major claims in the documents are that US officials manipulated statistics to suggest to the American public that the war was being won and that successive


By China Daily
December 11, 2019

Economics

7 of 10 Filipinos worried by presence of Chinese workers

China has increased its presence in the archipelago. The rising presence of Chinese workers in the country worry seven out of 10 adult Filipinos, according to the latest Social Weather Stations (SWS) survey, as the government recently launched a crackdown against Philippine offshore gaming operators (Pogos) which mostly employ Chinese nationals. The noncommissioned survey, conducted from Sept. 27 to 30, found that 31 percent “worried a great deal,” while 39 percent are “somewhat worried.” Highest in Metro Manila The proportion of those who were worried about the increasing number of Chinese workers in the country was highest in Metro Manila at 75 percent, followed by the Visayas at 71 percent, Luzon outside Metro Manila (69 percent) and Mindanao (67 percent.) About half of the respondents agree that the rising number of Chinese workers is a threat to national secur


By Philippine Daily Inquirer
December 6, 2019

Economics

Pakistan to launch Digital Pakistan Vision

Imran hopes to unleash ‘potential of youth and women’ with new venture. Prime Minister Imran Khan on Thursday said that with the introduction of the ‘Digital Pakistan Vision’, the full potential of the contribution of youth and the women to the economy will be unleashed. According to a press release from the Prime Minister Office: “The Vision sets Pakistan’s digital ambition and has been designed for the government and the private sector to work towards a digitally progressive and inclusive Pakistan.” Speaking at the launch ceremony of the initiative, the prime minister regretted not having launched it at the very beginning when his government was formed. “I should have given attention to Digital Pakistan earlier. This is the most important thing for Pakistan right now, especially its youth. The whole world is moving forward digitally and we have been l


By Dawn
December 6, 2019

Economics

Thailand looks to become LNG hub

Energy Minister Sontirat Songtijirawong declared at a conference. The Energy Policy Administration Committee today (December 4) acknowledged the guidelines for turning Thailand into the regional trading hub of liquefied natural gas (LNG). The guidelines came about from a study assigned by the government-appointed energy reform committee to PTT. Energy Minister Sontirat Songtijirawong said that the move was estimated to generate Bt165 billion for Thailand’s economy between 2020 and 2030. The country is expected to start full commercial trading late next year or early in 2021. Thailand has potential to become the regional hub due to its high demand of LNG and its geographical location as the centre of countries with high LNG demand, namely China, India, Japan, Cambodia, and Vietnam. Moreover, Thailand has a supportive infrastructure to serve regional LNG tradi


By The Nation (Thailand)
December 5, 2019

Economics

S. Korean negotiator hopes for ‘win-win’ burden-sharing deal with US

Trump has accused Korea of not paying its fair share of defense costs. South Korea’s top negotiator in defense cost-sharing talks with the United States said Monday that he believes the two sides will be able to strike a “win-win” deal based on their common understanding of the bilateral alliance. Jeong Eun-bo, the top envoy to the Special Measures Agreement negotiations, made the comment upon arriving at Washington’s Dulles International Airport ahead of the fourth round of talks slated for Tuesday and Wednesday. The previous round of talks in Seoul last month was cut short, publicly displaying the rift between the allies over how to share the costs for the stationing of 28,500 American troops in South Korea.


By The Korea Herald
December 3, 2019