Singapore faces recession winds – UOB


Economist Barnabas Gan at UOB Group assessed the GDP prospects in Singapore for the current year.

Key Quotes

“Singapore’s GDP contracted 2.2% y/y (-10.6% q/q saar) in 1Q20. This marks the first y/y fall since the Global Financial Crisis (2Q09: -1.2% y/y), down from 4Q19’s GDP growth pace of +1.0% y/y (+0.6% q/q saar).”

“All three major GDP clusters, namely manufacturing (-0.5% y/y), construction (- 4.3% y/y) and services (-3.1% y/y), contracted in 1Q20 amid the exacerbation of the COVID-19 pandemic.”

“MTI has downgraded Singapore’s growth outlook to a range of -4.0% to -1.0%, down from a previous outlook of -0.5% to +1.5%. The ministry added that the balance of risks “is tilted to the downside”, which includes a more protracted-thanexpected global COVID-19 outbreak, severe and prolonged disruptions to the global supply chain and the possibility of financial shocks in 2020.”

We downgrade Singapore’s full-year growth GDP in 2020 to contract 2.5% with downside risks, down from our previous estimate of +0.5%. The economy is expected to see four consecutive quarters of year-on-year contraction in 2020: 1Q20 (-2.2%), 2Q20 (-3.9%), 3Q20 (-2.8%) and 4Q20 (-1.2%), before seeing a recovery to 1.5% in 2021.”

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