Singapore narrowly avoids recession but not ‘out of the woods’ yet
- ‘It is still a half full, half empty kind of situation’, economist says
- Final figures for second quarter could be lower due to softening growth in China
Singapore’s economy narrowly escaped a recession in the second quarter as global demand weakened and China’s slowdown dragged on trade flows, leading some economists to cut their growth forecasts for the year.
The Southeast Asian economy grew a seasonally adjusted 0.3 per cent quarter-on-quarter, following a 0.4 per cent contraction in the first three months, preliminary government data showed on Friday. Four economists with quarterly estimates had forecast growth of 0.3 per cent in a recent poll.
“I don’t think we are out of the woods completely. It is still a half full half empty kind of situation” OCBC economist Selena Ling said, adding she expects the central bank to make no changes to monetary policy in a scheduled review in October.
She said that while Singapore had escaped a technical recession for now, there was a possibility that final GDP figures for the second quarter could be revised lower due to recent signs of softening growth in China.
China’s reopening had fuelled hopes for a sustained recovery in commerce and tourism for the region, especially Singapore’s export-dependent economy, but demand has weakened in the wake of higher interest rates and strong inflationary pressures.
On an annual basis, the economy expanded 0.7 per cent in the second quarter, data from the Ministry of Trade and Industry showed. That compared with 0.4 per cent growth in the prior quarter and a 0.6 per cent expansion forecast in a Reuters poll.
