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Singapore economic growth to slow down amid weaker global prospects: MAS
SINGAPORE — Subdued global growth in 2019 will exert a drag on the Singapore economy, the Monetary Authority of Singapore (MAS) said in its biannual macroeconomic review released on Friday (26 April).
Singapore’s gross domestic product (GDP) growth in 2019 is expected to come in slightly below the mid-point of the 1.5 to 3.5 per cent range, a step-down from the 3.2 per cent growth last year, the MAS said, keeping to forecasts made earlier this month.
“Slowing economic growth in Singapore’s key trading partners will continue to weigh on the economy, especially the trade-related sectors,” the review said. “In the coming quarters, slower global growth will weigh on the externally-oriented segments.”
The impact of the slowdown in China, Singapore’s biggest trading partner, as well as an expected decline in global chip sales, will drag on growth, according to the report.
The Singapore economy grew 1.3 per cent year-on-year in the first quarter of 2019, according to advance estimates by the Ministry of Trade and Industry released on 12 April. The GDP growth, which eased for the fifth straight quarter, is also the lowest in a decade.
Also, on that day, the central bank revised down its 2019 core inflation forecast to between 1 per cent and 2 per cent, from 1.5 per cent to 2.5 per cent previously.
In its review issued Friday, the MAS affirmed the forecast on inflation given lower global oil price projections and the impact of the opening up of the retail electricity market on electricity prices.
The review comes two weeks after the MAS kept its monetary policy unchanged after two consecutive rounds of tightening amid concerns of slowing growth.
Indicators such as job vacancies and survey readings suggest that labour demand remains firm with resident wage growth likely to moderate slightly in 2019, the report said.
Also, given the external challenges, the Singapore economy this year will have to turn towards domestic drivers for growth, led by the ongoing expansion in services arising from the digital transformation of the economy and the recovery of the construction sector, the report stated.
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