Singapore’s economic growth slows due to China’s difficulties

The city-state has been penalised by its reliance on exports to China. The government recorded the slowest on-year pace since the third quarter of 2016. Electronics and semiconductors are a source of vulnerability. GDP growth in 2019 is expected to be less than 2.5 per cent.

Singapore (AsiaNews/Agencies) – Singapore’s economy grew at its slowest pace in more than two years in the fourth quarter, data released today show.

Manufacturing is likely to face significant moderation this year, said Loh Khum Yean, permanent secretary at the Ministry of Trade and Industry (MTI).

Weakening growth momentum for Singapore’s economy – a hi-tech manufacturing base and transportation hub – underscores the risks to Asia’s export economies from a slowdown in China and Beijing’s trade war with Washington.

Export-oriented countries like Singapore will feel the pinch more than others. Electronics and semiconductor sector are particularly vulnerable. So are services, which account for roughly 70 per cent of the economy, Loh noted.

Gross domestic product (GDP) grew 1.9 per cent in the fourth quarter, less than the 2.2 per cent MTI estimate, the slowest on-year pace since the third quarter of 2016, when it grew 1.2 per cent.

Overall, the economy grew 3.2 per cent in 2018, compared with the 3.3 per cent MTI estimate.

Singapore’s GDP growth forecast for 2019 is now at between 1.5 and 3.5 per cent, but growth is more likely to be slightly below the range’s 2.5 midpoint.