Singapore's GDP will sink to new post-GFC low in 2015: HSBC

Growth will be at a measly 2.1%.

Singapore's full-year GDP is expected to sink to a new low in 2015, according to HSBC.

HSBC noted that the nation's 2015 GDP growth will likely register at a measly 2.1%, the slowest pace of growth since the Global Financial Crisis.

HSBC also said that Singapore's Q2 GDP decline will be particularly weak because of the 'astonishing' broad-based decline in manufacturing and services output.

"A contraction in manufacturing - likely to be revised downwards following the weak June industrial production print - was expected, but the decline in services output was not. The market will now focus on the potential revision to services (data will be out the week of 17 August) and will increasingly wonder whether or not a technical recession could materialize in Singapore, as this would suggest MAS easing its policy stance," HSBC said.

"From a growth perspective, Singapore’s high beta economy is going to be strongly impacted by global conditions in 2015. That said, a 2.1% outturn is in line with our estimates of Singapore’s potential growth rate of 2-3% over the next decade. A reading at the lower end, or even below that range, is likely to be offset by a pick-up in output in following years. Expansionary fiscal policies and an infrastructure push will further help Singapore return to growth, in our view," HSBC noted.