SINGAPORE (Reuters) - Singapore’s economy will struggle next year as slowing growth in China and Sino-U.S. trade tensions choke investments in trade-dependent industries such as electronics manufacturing, the central bank said on Wednesday.
Singapore’s economy, viewed as a bellwether by investors due to its sensitivity to shifts in global trade, is expected to expand at its slowest pace in a decade this year.
In its bi-annual macroeconomic review, the Monetary Authority of Singapore (MAS) said it expected growth to come in around the midpoint of its 0-1% forecast this year, and then improve modestly in 2020.
These forecasts are in line with previous estimates.
The MAS has cut its growth forecasts twice for this year since its last review in April.
“Downside risks have intensified since the last review, emanating from elevated policy uncertainty and a steeper-than-expected slowdown of the Chinese economy,” the MAS said.
“A synchronous slowdown is taking hold across Singapore’s major trading partners ... with the weakness in manufacturing, trade and investment likely to persist in the near-term.”
Growth in financial and digital services such as e-commerce, cyber-security and banking, as well as in construction and retail sectors should help offset a slowdown in high-tech manufacturing, the review noted.
“The domestic economy could experience fits and starts for the rest of the year, and into 2020,” the MAS said.
“The impact of the external headwinds will not be evenly distributed across the domestic economy.”
Reporting by Joe Brock and Fathin Ungku, Editing by Sherry Jacob-Phillips