The Singapore economy expanded by 0.7 per cent last year, down from 2018’s 3.1 per cent and its slowest in a decade reflecting the ongoing impact of China’s slowing economy and the US-China trade war.
This is Singapore’s slowest full-year growth since 2009, according to Bloomberg data. For the last three months of 2019, gross domestic product (GDP) expanded by 0.8 per cent from the same period a year ago, a nudge up from the revised 0.7 per cent growth in the third quarter, the Ministry of Trade and Industry (MTI) says.
On a quarter-on-quarter seasonally adjusted annualised basis, the economy grew at a slower pace of 0.1 per cent. This is way below the 2.4 per cent expansion in the previous quarter and below economists’ expectations of 0.4 per cent.
Manufacturing remained sluggish with its fourth consecutive quarter of contraction. The sector, which makes up about a fifth of Singapore’s economy, shrank by 2.1 per cent on a year-on-year basis in the fourth quarter, widening from the third quarter’s 0.9 per cent decline.
This was due to output declines in the electronics, chemicals and transport engineering clusters, which more than offset expansions in the other clusters such as precision engineering and biomedical manufacturing, MTI said in a statement.
Other sectors of the economy held the line with services producing industries expanding by 1.4 per cent from a year ago, with support from the finance and insurance sector, along with other services industries and the business services sector. This is greater than the 0.9 per cent growth in the third quarter.
On the back of public sector construction activities, construction grew 2.1 per cent on a year-on-year basis in the fourth quarter, slightly slower than the 2.4 per cent expansion in the previous three months.
Singapore’s export-oriented economy was hit hard in 2019 as the US-China trade war intensified, combined with a cyclical downturn in the electronics sector.
In his New Year message, Singapore Prime Minister Lee Hsien Loong said Singapore has been affected by the global economic slowdown. While the economy avoided a recession this year and is still growing, it is doing so “less vigorously than we would like”.
The upcoming Budget – due to be announced on 18 February – will include support measures for businesses to raise productivity and workers to retrain, as well as help for households to cope with living costs.