2019.08.1300:50:00UTC+00Singapore Cuts Growth Outlook Amid Escalating Trade Disputes

The Singapore economy is set to log a weaker growth this year as deepening trade disputes and slow global growth weigh on the city-state.

The economy is forecast to expand in the range of 0.0 to 1.0 percent this year instead of 1.5 to 2.5 percent estimated previously, the Ministry of Trade and Industry said Tuesday. The growth is expected to come in at around the mid-point of the forecast range.

The ministry trimmed its outlook citing challenging macroeconomic environment and the deepening downturn in the global electronics cycle.

Nonetheless, the government noted areas of strength in some domestic manufacturing clusters and services. Also, the recovery in construction is expected to be sustained.

Singapore's key export destination, especially the US is expected to see a moderate growth in the second half of 2019. China's economic growth is forecast to ease further in the second half on the back of weaker investment growth and a continued fall in exports, the ministry noted.

The MTI observed downside risks to global growth from US-China trade disputes, steeper-than-expected slowdown of Chinese economy, risk of a 'no-deal' Brexit and risks arising from uncertainties in Hong Kong and trade dispute between Japan and South Korea.

Data showed that the city-state contracted 3.3 percent on quarter-on-quarter annualized basis in the second quarter compared to the advance estimate of -3.4 percent.

On a yearly basis, the economy grew marginally by 0.1 percent, in line with the previous estimate.

The central bank is not considering holding an off-cycle policy meeting, Edward Robinson, deputy managing director of the Monetary Authority of Singapore reportedly said Tuesday. The monetary policy stance has not changed since its last meeting, he added. Elsewhere, the Enterprise Singapore revised down its trade performance forecast for 2019. Non-oil domestic exports are forecast to shrink 9 percent to 8 percent this year.

In the second quarter, the NODX contracted 14.6 percent annually due to decreased shipments of both electronic and non-electronic products, the Enterprise Singapore reported.