Singapore adds to gloomy forecast

16 Jul 19

An unexpected slowdown in Singapore has reinforced fears about the impact of trade tensions on the global economy.

Growth in the second quarter was at its most sluggish for a decade in the export-dependent economy raising fears of a recession, according to latest data, reported Reuters.

The figures compound nervousness generated by a continuing decline in Chinese exports which fell 1.3% in June from a year ago against the backdrop of tariff disputes with the US.

Singapore’s GDP shrank an annualised 3.4% in the second quarter on a seasonally adjusted basis from the previous three months, the biggest such fall since 2012.

It is often seen as a barometer of the global economy and its downturn is the latest evidence that momentum is slowing across Asia as a result of the US–China trade war.

Singapore is heavily integrated in regional and global supply chains which makes it vulnerable to a global slowdown  – and in particular to whatever happens in China.

In May Singapore’s non-oil exports fell by their highest level since 2013, largely because of a slump in the electronics sector. Exports to China fell 23.3% from a year earlier.

Singapore has one of the busiest ports in the world, and in May container throughput fell.

Pessimism has been reinforced by the latest Chinese trade figures showing that exports fell in June – down 1.3% from a year earlier according to customs data – and imports shrank more than expected.

Washington imposed tariffs on China after trade talks between the world’s largest economies broke down.

Although talks got back on track in June, it was the first full month in which higher US tariffs on $200bn of Chinese goods applied, and economists remain nervous about the global economy and have cut growth forecasts.

The Chinese trade figures add to recent data indicating growth at a 30-year low that is fuelling expectations that the government in Beijing will soon announce economic stimulus measures.

  • Gavin O'Toole, expert on Latin America
    Gavin O'Toole

    A freelance journalist. He has written six books about Latin America and taught the politics of the region at Queen Mary, University of London.

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