SINGAPORE: Singapore’s economy grew by 0.7% in 2019, slower than the 3.4% growth recorded in 2018, according to the republic’s Ministry of Trade and Industry (MTI) in a statement today (Feb 17).
For 2020, MTI said, it has downgraded the Gross Domestic Product (GDP) growth forecast to -0.5% to 1.5%, with growth expected to come in at around 0.5%, the mid-point of the forecast range.
The ministry said Singapore’s economy grew by 1.0% on a year-on-year basis in the fourth quarter, faster than the 0.7% growth in the third quarter.
For the whole of 2019, MTI said the manufacturing sector contracted by 1.4%, a reversal from the 7.0% growth in 2018.
The sector’s performance was weighed down by output declines in the electronics, chemicals, precision engineering and transport engineering clusters, it said.
The construction sector expanded by 2.8%, a turnaround from the 3.5% contraction in 2018, supported by both public sector and private sector construction works.
The services-producing industries grew by 1.1%, moderating from the 3.4% growth in 2018.
Growth was mainly driven by the finance & insurance, other services and business services sectors, which expanded by 4.1%, 2.6% and 1.4% respectively.
On the economic outlook for 2020, MTI said that taking into account the global and domestic economic environment, the GDP growth forecast for this year is downgraded to “-0.5 to 1.5%”.
“Growth expected to come in at around 0.5%, the mid-point of the forecast range,” it said.
In November 2019, MTI announced a GDP growth forecast of “0.5 to 2.5%” for 2020.
MTI noted that the forecast was premised on a modest pickup in global growth, along with a recovery in the global electronics cycle, in 2020.
Since then, the outbreak of the coronavirus disease 2019 (COVID-19) has affected China, Singapore and many countries around the world, it said.
The ministry noted that the outlook for the Singapore economy has weakened since the last review in November.
In particular, MTI said the COVID-19 outbreak is expected to affect the Singapore economy through three channels.
One of them is an outward-oriented sector such as manufacturing and wholesale trade will be affected by the weaker growth outlook in several of Singapore’s key final demand markets, including China.
Besides that, the outbreak has led to a sharp fall in tourist arrivals, particularly from China, to Singapore.
“This has badly affected the tourism – hotels, travel agents and cruise operators – as well as air transport sectors,” it said.
Nonetheless, MTI said there are pockets of relative strength in the Singapore economy.
“These include the construction sector, which is projected to post steady growth given the rebound in construction demand since 2018.
“The information & communications sector is also expected to be resilient on account of sustained enterprise demand for IT solutions,” it said.
As the COVID-19 situation is still evolving, MTI said it will continue to monitor developments and their impact on the Singapore economy closely. – Feb 17, 2020, Bernama
