Singapore cuts GDP growth forecast amid US-China trade war

Range of expected 2019 GDP growth reduced from 1.5-2.5% down to 0-1%

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Singapore Skyline (Pixabay photo / cegoh)

Singapore Skyline (Pixabay photo / cegoh)

TAIPEI (Taiwan News) – With the U.S.–China trade war expected to continue disrupting regional and global economic outlooks for 2019 and 2020, Singapore drastically cut its expected growth forecast on Tuesday (Aug. 13).

Faced with the slowest growth the city-state has seen in a decade, Singapore has reduced its expected growth from 1.5 to 2.5 percent for 2019 down to a 0 to 1 percent for 2019, repots Straits Times. Singapore’s trade reliant economy makes it especially susceptible to market imbalances caused by the escalating trade war between Washington and Beijing.

Negative effects of the trade war have already been felt in Singapore. In the year’s second quarter, Singapore’s economy reportedly contracted 3.3 percent, after an initial modest period of 3.8 percent growth in the first quarter.

The Ministry of Trade and Industry released a statement that said “GDP growth in many of Singapore’s key final demand markets in the second half of 2019 is expected to slow from, or remain similar to, that recorded in the first half,” reports Reuters.

The Straits Times quotes a senior economist the DBS Singapore bank, Irvin Seah, who says that if the Trump administration enforces tariffs on China's electronic goods starting from September, it will “deeply affect the value chain that Singapore is plugged into.”

If trends continue, Singapore’s economy may be set for a recession in the near future, according to some reports. The Central Bank of Singapore is expected to convene a series of meetings in October to determine if any financial support measures will need to be implemented to cope with the economic downturn that is likely coming, reports Reuters.