News: Singapore’s economy expected to have 0.5% growth in 2019

Oct 21, 2019

Meanwhile, MAS expects global economic growth in 2019 to slow down “discernibly” and then stabilise in 2020 “barring further shocks”.

Singapore’s economy is expected to grow 0.5 percent in 2019, with the 2020 growth prediction being below consensus at one percent, reported Singapore Business Review citing Bank of America Merrill Lynch (BofAML) Global Research.

The Monetary Authority of Singapore (MAS) believes the economy will improve modestly but below potential in 2020. Retail and manufacturing sector is seen to perform poorly, although finance & insurance, domestic-oriented services, construction and ICT may encounter continued expansion.

With the authority’s estimate that the output gap only turned slightly negative despite a steep fall in growth during the last few quarters, BoFAML said that this, however, points to potential growth being below the two to three official estimates.

MAS expects global economic growth in 2019 to slow down “discernibly” and then stabilise in 2020 “barring further shocks”.

A Fitch Solutions report indicated that the economic growth is on course to slow to 0.9 percent by the end of 2019 after quarters of dismal economic showing in Q2.

The economy grew 0.1 percent year-on-year (YoY) and 0.6 percent quarter-on-quarter (QoQ) SAAR in Q3, narrowly escaping a technical recession.

RELATED: 2019 Growth Forecast For Singapore’s Economy Slashed To 0.6%

BofAML also predicts MAS to further ease the appreciation rate of $NEER to a zero percent slope, in line with the forecast of UOB.

“Such a move will be consistent with two years of below-trend growth and below-target inflation, which could ultimately threaten medium-term price stability,” said Merrill Lynch economist Mohammed Faiz Nagutha.

Meanwhile, manufacturing dropped 3.5 percent YoY, heavily influenced by electronics and precision engineering. Services grew 0.7 percent QoQ but dropped to 0.9 percent YoY, with sequential contraction in construction eased to dropping 1.1 percent QoQ and rose 2.7 percent YoY during the same period.

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg

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