Singapore’s economic growth projected to weaken to 1.9% this year: report

The Singapore economy is likely to slow to a growth of 1.9% this year, lagging from the 3.1% growth in 2018, as the export-oriented country faces headwinds from the renewed tensions between the United States (US) and China, a report from the Institute of Chartered Accountants in England and Wales (ICAEW) said this week.

The growth for this year would be the sharpest slowdown in gross domestic product (GDP) growth in the region. Growth among the Southeast-Asian nations however, should not be compared amongst one another as Singapore is a matured economy and would not have higher growth numbers like its surrounding emerging economies such as Vietnam, for example.

The experts in the ICAEW report cautioned that the Singapore economy could likely dip into recession in 2020, should external conditions deteriorate further.

‘As a small and open economy that is heavily dependent on exports, Singapore's growth will likely be the most negatively affected,’ ICAEW said.

This is as renewed trade tensions between the US and China come at a time when export growth across the region is already facing a difficult external environment, added Mr Mark Billington, ICAEW regional director for Greater China and Southeast Asia.

Regional growth is also predicted to slow from 5.3% last year to 4.8% this year, before easing to 4.7% next year, due to the US-China trade tensions.

Ms Sian Fenner, ICAEW economic adviser and Oxford Economics lead Asia economist, said it is unlikely for the re-escalation of trade tensions between US and China to ease any time soon.

'We expect exports and overall economic growth to continue to come under further pressure,’ Ms Fenner said.

For the first quarter of this year, the Singapore economy grew by 1.2%, the lowest growth rate in almost 10 years. The reading was below the government’s earlier estimate of a 1.3% growth, and missed economists’ expectations of a 1.5% increase.