Singapore 1Q GDP growth y-o-y likely slowest in nearly a decade
Published on: Saturday, May 18, 2019

SINGAPORE: Singapore’s annual growth rate in January-March likely was the lowest for any quarter in nearly a decade as manufacturing and exports were hit hard by the US-China trade war, a Reuters poll showed on Friday.

Final gross domestic product (GDP) is forecast to have expanded 1.5pc in the first quarter from a year earlier, the poll of 12 economists showed, up slightly from the 1.3pc seen in the government’s advance estimate and down from the fourth quarter’s 1.9pc pace.

This would be the slowest annual expansion for any quarter since April-June 2009, when GDP shrank 1.7pc from a year earlier, government data shows.

On a seasonally adjusted and annualised quarter-on-quarter basis, growth in the January-March period was forecast in the poll at 2.3pc, higher than the advanced estimate of 2.0pc and the fourth quarter’s 1.4pc rise.

On Friday, Singapore reported that non-oil domestic exports in April dropped 10pc from a year earlier, with a continued decline of electronics shipments and falls in exports to most major trading partners.

Weakening growth momentum for Singapore’s open economy – a high-tech manufacturing base and transportation hub – underscore the risks to Asia’s export economies from the protracted US-China trade war.

“Lingering tech weakness at least partly reflects a supply-side reaction to US-China tariffs,” JP Morgan Economist Benjamin Shatil said in a note to clients.

“Singapore’s China-bound exports have been particularly volatile over the past few months”.

Policymakers said on April 12 that full-year growth would likely come “slightly below the mid-point” of the central bank’s expected 1.5-3.5pc range.

Weak export numbers have prompted Oxford Economics analyst Sian Fenner to trim her growth forecasts for Singapore.

“The outlook for exports has deteriorated further following more tariff hikes by both the US and China,” Fenner said in a note, adding that she now expects full-year growth of 2.2pc in 2019 and 2020, instead of 2.3pc this year and 2.5pc next year.


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