On Thursday, preliminary data shows, in 2019 Singapore’s economy grew at its slowest pace in a decade; its manufacturing sector also saw a contraction. Fourth quarter data however is expected to show a modest recovery.
The U.S.-China trade war has had a significant impact on Singapore’s export-oriented economy. Cyclical global downturn in the electronics sector have also taken a toll on its economy.
In 2019, Singapore’s gross domestic product (GDP) grew by 0.7% – its slowest annual pace since 2009, down from 3.1% in 2018. For 2020, authorities expect a growth rate between 0.5% to 2.5%. The country’s biggest bank, DBS, has forecast a growth of 1.4%.
With the island nation likely to go into election mode within months, economists expect a “generous” fiscal support from the government to bolster growth at the upcoming budget session on February 18.
“We are seeing improvement on the growth front although it will likely be a weak recovery,” said Irvin Seah, an economist at DBS, while adding, “The government is going to roll out the fiscal budget next month and this will likely be very generous”. He cited surpluses accumulated in recent years and upcoming elections, which must be held by early 2021 at the latest.
“The global economic slowdown has already affected us. This year we avoided a recession. Our economy is still growing, but less vigorously than we would like,” said Prime Minister Lee Hsien Loong in his annual New Year message on December 31.