Singapore’s economy grew by a paltry 0.1 per cent in the second quarter of this year, the lowest in a decade, according to official estimates released on Friday (12 July), The Strait Times reported.
Estimates released by the Ministry of Trade and Industry (MTI) pegged Singapore's economic growth at 0.1 per cent in the second quarter of this year. This is the lowest growth for the city-state since its economy contracted by 1.2 per cent in the second quarter of 2009 during the Great Recession triggered by global financial crisis.
A poll of economist by Reuters and Bloomberg had forecast a growth rate of 1.1 per cent for the second quarter.
In early signs of trouble, Singapore’s GDP growth had slowed down to 1.3 per cent in the first quarter of 2019.
The abysmal second quarter growth rate has raised fear that Singapore may slide into recession amid global economic headwinds and a protracted trade war between China and USA.
The latest growth estimates pointed to weakness across key sectors. Manufacturing, especially electronics and precision engineering, shrank 6 per cent from the previous quarter, while construction contracted by 7.6 per cent and services by 1.5 per cent.
Analyst attribute Singapore’s dismal growth on its dependence on high-tech exports which has further been exacerbated by trade tensions, that has disrupted supply chains across Asia.
Unless the export control imposed as US-China trade war is dispensed away, prospects of economical revival for Singapore looks bleak.
According to Reuters, Electronics manufacturing output, which is a critical part of Singapore’s economy in the last two years, declined for the sixth consecutive month in May while exports saw their biggest decline in more than three years.
The Strait Times quoted Selena Ling, head of treasury research and strategy at OCBC Bank, as saying that the risk of a technical recession is growing by the day.