Analyst finds substantial risk in Singapore’s technical recession

The decline will be largely driven by the weakness in manufacturing.

The recent manufacturing output declined 4.2% on a yearly basis, which could signify further risk to economic growth in Singapore.

According to UOB, the “risks to global and Singapore's growth are tilted to the downside, and there is a substantial risk Singapore may enter into a technical recession in 1H 2023 largely driven by the weakness in manufacturing.”

The central bank even warned that the global electronics industry is in a sharp downturn, which could lead to subdued global investment and manufacturing. 

The boost to demand in regional economies from their reopening in 2022 will also fade over 2023, and there will be lower spillover benefits from China's rebound.

Looking ahead, UOB said its forecast for Singapore’s manufacturing outlook will contract by 5.4%.