Budget measures, policy easing won’t revive the economy, says Deutsche Bank

Global growth will remain muted.

Domestic policies can only go so far in alleviating Singapore’s growth slowdown. A report by Deutsche Bank noted that there is little hope for strong growth in Singapore unless there is a marked rebound in the city-state’s core manufacturing and construction sectors.

“Budgetary measures and exchange rate policy tweaking could help on the margin, but we highly doubt if they can propel growth substantially upward,” said Taimur Baig, chief economist at Deutsche Bank.

He added that the risks facing Singapore are beyond the city-state’s control, as global growth outlook continues to remain subdued.

In particular, the slowdown in China will negatively impact Singapore's economy. Apart from being reliant on Chinese trade, a slowing China also means less support for a wider range of activities in Singapore, including tourism, gaming, real estate, wealth management, education, healthcare, and retail sales

“Given the authorities' published analysis of the economic situation and outlook, we see them believing the same, and therefore unlikely to make a vigorous effort at counter-cyclical policy,” he said.