No 'outright recession' for Singapore but negative growth looms, says MTI

Finance, insurance, and wholesale trade still face external headwinds.

With the weak economic indicators for the past several months including rising unemployment, slower growth projections and weak global economic outlook, some analysts are already saying that Singapore is already in technical recession. However, Trade minister Lim Hng Kiang expects no outright recession to take place in the near term.

In a speech before the Parliament on Monday, Lim stressed that there will be no outright recession even if the growth projection for the second half of the year is expected to come in lower than the 2.1% achieved in the first six months.

"Our baseline projection is not an outright recession, but we cannot rule out the possibility that the economy will experience some quarters of negative growth on a QoQ basis," he said.

He noted that several sectors, including externally-oriented services sectors, such as finance & insurance and wholesale trade, have slowed and continually faced external headwinds.

More so, manufacturing output has shown signs of weakness on the back of sluggish external demand.

However, Lim stressed that there are still bright spots in the city-state’s economy.

"Tourism-related sectors such as accommodation have benefitted from the recovery in tourist arrivals. Growth in “other services industries” and the information & communications sector is also expected to remain resilient, supported by growth in the education, health & social services and IT & information services segments respectively," he said.

With this, Lim stated that the state will continue to monitor the situation closely and stands ready to respond in the event of a downturn.

"Depending on the nature and severity of the downturn, the Government is prepared to consider introducing a range of contingency measures, which could include broad-based as well as sector-specific measures," he underscored.