Weaker exports amid lacklustre external demand and a limited boost from China’s reopening are among the uncertainties ahead for Singapore's economy, according to private-sector economists.
SINGAPORE: Singapore faces a"high risk" of slipping into a technical recession in the second quarter as challenges in the external environment persist, some private-sector economists said on Thursday .declined 0.4 per cent from the previous three-month periodThis marks a reversal from the 0.1 per cent growth in the fourth quarter of 2022, leaving the economy at risk of a technical recession which is defined as two consecutive quarter-on-quarter contractions.
Singapore’s small and open economy relies heavily on trade, but external demand has been weakening amid a slowdown in the global economy, still-strong inflationary pressures and a downturn in the global semiconductor industry.. Authorities on Thursday also downgraded the 2023 forecasts for NODX following a “worse-than-expected” performance in the first quarter.
“This dynamic raises the risk of a technical recession given the export-driven nature of Singapore’s economy.”With the weaker performance in external-oriented sectors, such as manufacturing, likely offsetting the resilience in other parts of the economy like tourism, Maybank economists Chua Hak Bin and Lee Ju Ye see the economy stagnating, instead of staging a rebound, in the coming quarters.
Domestically, falling inflation will provide some relief for households, but nominal wage growth and employment could be in for “a sharp slowdown” in the near term, said Mr Tandon. DBS economist Chua Han Teng does not expect a technical recession and is penciling a turnaround in the economy in the second half of 2023 to take full-year growth to 2.2 per cent.
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