Singapore Cuts Growth Outlook Amid Escalating Trade Disputes

Singapore slashes 2019 GDP growth forecast after sharp Q2 contraction

Singapore slashes 2019 GDP growth forecast after sharp Q2 contraction

Meanwhile, China's growth is projected to ease further in the second half of the year on the back of weaker investment growth and a continued decline in exports, exacerbated by the increase in the US's tariffs on its exports.

The city state's economy is seen growing 0%-1% this year, down from a previous projection of 1.5%-2.5%, the Ministry of Trade and Industry said in a statement Tuesday, with growth expected to come in near the midpoint of the range.

As the global economy goes, so go the forecasts for Singapore's gross domestic product growth. Singapore's trade reliant economy makes it especially susceptible to market imbalances caused by the escalating trade war between Washington and Beijing.

By contrast, output in the biomedical manufacturing and general manufacturing clusters rose.

For the construction sector, it expanded its growth to 2.9%, extending the 2.8% growth in the first quarter, since construction output was supported by public sector construction works. In the year's second quarter, Singapore's economy reportedly contracted 3.3 percent, after an initial modest period of 3.8 percent growth in the first quarter.

The city-state yesterday cut its full-year forecast for non-oil domestic exports to a 9 percent contraction from an 8 percent fall previously.

Growth in the accommodation & food services sector slowed to 0.9% YoY from 2.0% in the previous quarter as the food services and accommodation segments propped up headline figures. At 0.5%, 2019 growth may be the slowest since 2009. The food services segment expanded on account of higher sales at fast food outlets, other eating places and restaurants, whilst the accommodation segment grew on the back of a rise in global visitor arrivals.

The food services segment expanded on account of higher sales at fast food outlets, other eating places and restaurants, while the accommodation segment grew on the back of a rise in global visitor arrivals.

The information & communications sector grew by 4.1% YoY, easing from the 5.2% growth in the previous quarter.

The sector's strong performance was largely due to expansions in the fund management, foreign exchange trading, and "others" segments.

As for the service producing industries, it grew by 1.1%, as opposed to the 1.2% in the first quarter - all thanks to the growth in sectors like transportation and storage, information and communications, as well as finance and insurance.

"This could severely dent global business and global confidence, with adverse implications on global trade and global economic growth".

GRIM second-quarter export numbers, coupled with a downgrade in the official forecast for the year, have all but dashed economists' hopes for a turnaround in Singapore's trade outlook.

GDP growth in the key Asean economies, however, is expected to remain resilient for the rest of the year.

Nonetheless, there are several areas of strength in the Singapore economy, said MTI.

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