Singapore's economic growth is expected to slow down in the second half of this year, even as the Ministry of Trade and Industry (MTI) kept to its full-year forecast of 2.5 to 3.5 per cent in 2018, with trade tensions weighing on the outlook.
This follows the "strong performance" in the first half of year, said MTI, where the economy clocked in growth of 3.9 per cent year on year in the second quarter of 2018, easing from the first three months when the economy expanded 4.5 per cent.
The latest Q2 figure is above advance official estimates of 3.8 per cent but below market forecasts of 4.1 per cent growth.
On a quarter-on-quarter seasonally-adjusted annualised basis, the economy expanded by 0.6 per cent, moderating from the 2.2 per cent growth in the preceding quarter.
Looking ahead, the MTI said that growth in several of Singapore's key demand markets such as the US and China is expected to ease in the second half of the year. The ministry also highlighted that uncertainties and downside risks in the global economy have increased since early 2018.
The first was the recent tariff measures by the US on its trade partners, which could result in a "vicious cycle" of tit-for-tat retaliatory measures.
The second was generally tightening financial conditions, which could lead to faster-than-expected normalisation of monetary policy in the US, triggering "disorderly" outflows from emerging markets in the region.
However, Singapore's growth will continue to be supported primarily by outward-oriented sectors, such as manufacturing, finance & insurance, wholesale trade, and transportation & storage, said the MTI.
Adapted from The Straits Times, 13 August 2018.