Fleeing recession, Singapore even lowers economic forecasts

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Jakarta, Klinik Farma – The dark economic cloud has not yet completely dissipated in the Asian region. Most recently, Singapore cut its economic growth forecast for this year due to weak demand from key export markets, including China and the United States (USA).

Meanwhile, Southeast Asia’s economic performance is often viewed as a barometer of global conditions due to its reliance on international trade.

The Department of Trade and Industry (MTI) on Friday said it had narrowed its economic growth forecast for this year to 0.5%-1.5% from a previous estimate of 0.5%-2.5%. Singapore’s economy will grow by 3.6% in 2022.

“Overall, according to MTI, Singapore’s external demand outlook for the remainder of the year remains weak,” the ministry said in a statement. AFPFriday (8.11.2023).

“The global downturn in electronics is also likely to drag on, with a gradual recovery no earlier than the end of the year.”

MTI estimates that even as China, the world’s second largest economy, and other positive global trends reopen, the downside risk for the global economy remains.

The regulator cited persistently high inflation that could limit global spending and potential supply disruptions caused by “an escalating war in Ukraine and geopolitical tensions between major world powers.”

Among major US export markets, the ministry said, “the economy is forecast to slow more significantly in the remaining quarters of this year as rising interest rates and a cooling labor market weigh on private consumption.”

Growth in the eurozone and China is expected to be sluggish through the end of the year.

As a small and open economy, Singapore is usually one of the first to be affected by external events before their effects spread around the world.

Meanwhile, official data released on Friday showed economic growth in the second quarter of 2023 was 0.1% qoq, slightly weaker than the 0.3% growth reported in the initial estimate last month.

However, these results saved Singapore from recession after the economy contracted by 0.4% in the first quarter of 2023.

On an annualized basis, the economy expanded 0.5% in the second quarter, continuing its 0.4% growth in the previous three months.

[Gambas:Video CNBC]

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