The exterior of the Singapore Exchange building.
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Singapore’s economy avoided a technical recession in the second quarter, growing 0.7% year-on-year and 0.3% quarter-on-quarter, pre-estimated show.
Economists polled by Reuters had forecast growth of 0.3% quarter-on-quarter and 0.6% year-on-year.
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In the first quarter, Singapore’s economy contracted by a seasonally adjusted 0.4% quarter-on-quarter and grew marginally by 0.4% year-on-year.
The latest data came after the Monetary Authority of Singapore, Singapore’s central bank and financial regulators warned earlier this month that the outlook for growth was “uncertain”.
“The short-term outlook remains uncertain with downside risks,” MAS says in annual review. “Should potential vulnerabilities emerge in the global financial system in the coming months, consumer and investor confidence could be further hit, with adverse consequences for the broader economy,” the report said.
In its annual review, the HKMA expects gross domestic product to slow to 0.5% to 2.5% in 2023, down from growth of 3.6% in 2022.
this singapore dollar It strengthened slightly against the dollar following the GDP release, trading at $1.321 against the greenback.
Singapore’s manufacturing sector clearly led the decline in overall growth, contracting 7.5% year-on-year, down further from a 5.3% contraction in the previous quarter.
“The sector’s weakness was due to lower output in all manufacturing clusters except the transport engineering cluster,” Singapore’s Ministry of Trade and Industry said.
Singapore’s latest industrial production data stoked fears that the economy could slip into a technical recession.number Falls for second straight month May fell 10.8% year-on-year, and domestic non-oil exports fell sharply 14.7% in May.
“Pockets of Resilience”
HSBC economist Yun Liu noted that Singapore could avoid a recession for the full year, adding that the economy “still has some resilience”.
In HSBC’s third-quarter outlook report, Liu pointed to a steady recovery in the number of visitors to Singapore and “the knock-on effect will mainly come from the tourism industry”, adding that the recovery of Chinese tourists has not yet reached the level seen in 2019.
Monthly statistics of its tourism agency Data show that since March this year, Singapore has continued to welcome more than 1 million visitors.
“Although the return of Chinese tourists has only recovered to 30% of the same level (2019 level), Singapore is still the champion of resuming direct flights with China,” Liu said. “This paves the way for accelerated growth of Chinese tourists in the coming months. roads, which support Singapore’s service industry.”
“Singapore is well positioned to lead a rapid recovery in the region,” Liu said.