May 26, 2023
2 mins read

Singapore at high risk of technical recession

Singapore’s small and open economy relies heavily on trade, but external demand has been weakening amid a slowdown in the global economy…reports Asian Lite News

After Germany entered recession, Singapore fears slipping into a ‘technical recession’ in the second quarter as the country’s exports outlook weakened following a slowdown in global demand, Channel NewsAsia (CNA) reported citing economists.

Singapore’s economy is heavily dependent on exports, which has been weakening after several agencies earlier forecasted a slowdown in global economies in 2023.
“There remains a high risk that the economy slips into a technical recession, either in (the second quarter) or in the second half of the year,” CNA, Singapore’s state broadcaster reported Shivaan Tandon from Capital Economics, as saying.

A technical recession is often defined as two consecutive quarters of negative growth in the real GDP.

“While advanced economies have held up better than initially expected, we expect that resilience to fade in the second half of the year which will weigh heavily on demand for Singapore’s exports,” he added.

He further stated that these dynamic raises the risk of a technical recession given the export-driven nature of Singapore’s economy.

These comments came after the official data for the first quarter showed the economy declined 0.4 per cent, reported CNA.

This marks a reversal from the 0.1 per cent growth in the fourth quarter of 2022, leaving the economy at risk of a technical recession which is defined as two consecutive quarter-on-quarter contractions.

Singapore’s small and open economy relies heavily on trade, but external demand has been weakening amid a slowdown in the global economy, still-strong inflationary pressures and a downturn in the global semiconductor industry.

The country’s key non-oil domestic exports (NODX) have since chalked up a seven-month losing streak. Authorities on Thursday also downgraded the 2023 forecasts for NODX following a “worse-than-expected” performance in the first quarter.

Meanwhile, Maybank economists Chua Hak Bin and Lee Ju Ye, with the weaker performance in the external-oriented sector, see Singapore’s economy stagnating, instead of staging a rebound, in the coming quarters, according to CNA.

They added that Singapore may slip into a technical recession “if the boost from China’s reopening fails to materialise in the second quarter”.

Earlier, the German economy was in recession in early 2023 after household spending in Europe’s economic engine finally succumbed to the pressure of high inflation, according to Reuters.

Gross domestic product fell by 0.3 per cent in the first quarter of the year when adjusted for price and calendar effects, a second estimate from the statistics office showed on Thursday. This follows a decline of 0.5 per cent in the fourth quarter of 2022. A recession is commonly defined as two successive quarters of contraction, as per the report in Reuters.

Germany’s Finance Minister Christian Lindner, on Thursday, said that the GDP data showed “surprisingly negative signals.”

He added that comparing Germany with other highly developed economies, the economy was losing the potential for growth.

“I don’t want Germany to play in a league in which we have to relegate ourselves to the last positions,” Lindner said, referring to the forecasts of the International Monetary Fund, which predicted a recession in 2023 only in Germany and Britain among European countries, according to Reuters. (ANI)

ALSO READ: Germany enters recession

Previous Story

Beijing’s ban on Micron Technology will draw backlash, warns expert

Next Story

US House panel recommends NATO+ status for India

Latest from -Top News

Pakistan Faces Rising Uprisings

Officials warn that Pakistan cannot continue suppressing such protests by force indefinitely. A breaking point, they say, is inevitable — when the growing discontent converges into a major challenge for the establishment

UN Faces Crisis, Says Rajnath

Rajnath Singh said India recognises that the success of peacekeeping depends not only on numbers but on preparedness….reports Asian Lite News Defence Minister Rajnath Singh on Tuesday highlighted the urgent need for

UK to host summit on Gaza recovery plan

The three-day conference, beginning Monday afternoon, will take place at Wilton Park, the Foreign Office’s policy forum based in West Sussex The UK will host an international summit on the recovery and

India, Australia Begin AUSTRAHIND

The AUSTRAHIND exercise, which followed Defence Minister Rajnath Singh’s recent visit to Australia, reaffirmed the deepening defence cooperation between the two nations…reports Asian Lite News Strengthening the expanding defence partnership between India

‘Modi’s a Very Good Friend’: Trump

Trump’s remarks come days after Modi called him to congratulate on the “success” of the Gaza peace plan….reports Asian Lite News US President Donald Trump on Monday lauded India and described Prime
Go toTop

Don't Miss

Singapore reports 335 new Covid cases

Singapore reported 335 new cases of Covid-19 in the past

Stalin woos investors in Singapore, signs 6 MoUs

During Stalin’s Japan visit, various MoUs are also expected to