S’PORE CUTS 2019 FORECAST
City state’s Q1 growth of 1.2pc is lowest in nearly a decade
SINGAPORE’S annual economic growth slipped to the lowest in nearly a decade in the first quarter as manufacturing contracted in the wake of a protracted SinoUnited States trade war, prompting a downgrade to the citystate’s full-year growth forecast.
Gross domestic product (GDP) expanded 1.2 per cent year-onyear in the three months ended March 31, final official data showed yesterday, down slightly from the 1.3 per cent seen in the government’s advance estimate and the fourth quarter’s revised 1.3 per cent pace.
The result, which was below the 1.5 per cent growth forecast in a Reuters poll, marked the slowest annual expansion for any quarter since April-June 2009, when GDP shrank 1.7 per cent from a year earlier, government data shows.
As broad economic momentum cooled, policymakers downgraded their growth forecast to between 1.5 and 2.5 per cent, from between 1.5 and 3.5 per cent previously.
“Uncertainty from the trade tensions (between the US and China) have affected the sectors
Singapore has relied on in the last two years,” said Continuum Economics head of Asia research Jeff Ng.
Singapore has been hit hard by the Sino-US trade war, which has disrupted global supply chains, business investment and corporate profits.
Trade and Industry Ministry permanent secretary Gabriel Lim said slowing China growth and the trade dispute between Washington and Beijing were expected to weigh on Singapore’s output, while slack global demand for electronics was already hitting its manufacturing sector.
“Against this challenging external economic backdrop, key outward-oriented sectors in the Singapore economy are expected to slow this year,” said Lim.
“In particular, the electronics and precision engineering clusters... are expected to face strong headwinds on account of a sharper-than-expected downturn in the global electronics cycle, as well as uncertainties arising from the ongoing trade conflicts.”
On a seasonally adjusted and annualised quarter-on-quarter basis, growth in the JanuaryMarch period was at 3.8 per cent, higher than the advanced estimate of 2.0 per cent and the poll forecast of 2.3 per cent.
Meanwhile, the construction sector grew for the first time in 10 quarters on an annual basis, led by private and government sector work.
On the flip side, manufacturers bore the brunt of weakening global demand, contracting 7.1 per cent in the first quarter.
The deteriorating global conditions forced Singapore to also downgrade its 2019 forecast for non-oil domestic exports to a contraction of between two and zero per cent as shipments in the first quarter shrank 6.4 per cent on an annualised basis.
A central bank official said its monetary policy stance, which was kept unchanged last month after two rounds of tightening, remained appropriate.