Singapore to avert technical recession in Q3: analyst

The economy is tipped to grow 0.4% YoY and 2.1% QoQ saar in Q3.

Singapore is expected to avert a technical recession in Q3 2019, as the economy is tipped to post growth of 2.1% QoQ saar and 0.4% YoY amidst slight improvement in the manufacturing sector, reported DBS Group Research. On a full year basis, GDP growth is poised to hit 0.7%.

Also read: Singapore GDP growth to fall to 0.9% by end-2019 as technical recession risks loom

A technical recession is defined as growth contracting for two consecutive quarters. In Q2, the economy slowed to a mere 0.1% after GDP growth hit a decade-low in the previous quarter at 1.3%.

Inflation is expected to average 0.5% for the full year period and rise 1.1% in 2020. Spikes in oil prices was cited as a key driver of inflation, with a 10% rise expected to lift consumer price index inflation by around 0.3 ppt.

Like its regional neighbours, Singapore is grappling with a slowing growth rate. Domestic indicators like a weakening services sector, moderating loan growth and soft labour market has weighed on headline growth. Output gap turned even more negative in Q2. In particular, job vacancy to unemployed person ratio fell below one and employment growth dropped to a three-year low.

Decline in billings of semiconductor equipment and global shipment of semiconductors eased. Likewise, contraction in industrial output slowed to 0.4% YoY from 8.1%.

The Purchasing Managers Index in Singapore was observed to show signs of stabilisation after falling amidst slowing global demand and trade war. Non-oil domestic exports to China spiked up, but its sustainability is deemed uncertain.

In response to weakening growth, Singapore is likely to pursue a highly expansionary fiscal policy by early next year, according to Irvin Seah, economist at DBS. “An outsized accumulated surplus of about $15.6b implies ample room for aggressive fiscal support for the economy,” he said.

Seah also expects the Monetary Authority of Singapore to slightly decrease the annual appreciation pace of SGD NEER policy band to 0.5% from 1% at its policy review in October.

If you've been wondering whether SBR could work for your company — yes, probably.

A lot of the companies we partner with started as readers. They'd been following our coverage for a while, saw their own customers and competitors in it, and eventually asked the obvious question: could we do something with you? The answer is usually yes. The shape of it depends on what you're trying to do.

The options are broader than most people assume — thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. Some partners use one channel; most use a mix. We figure out the right combination by starting with your brief, not with our rate card.

So if the question has been on your mind, here's the easy way to ask it.

We'll tell you honestly whether we can help, and how. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia