Recorded as the slowest growth in the last 10 years, Singapore’s economic growth was less than 1.2% of the growth that was expected; a direct repercussion of the malfunctioning of the major manufacturing units in the country which is in turn because of the trade tension globally predominant and experienced between the United States and China and their electronic clash. Another two probable reasons influencing this slog can be the sedate economic growth of China, along with the Brexit getting postponed till October 31. The last time the country’s growth touched this low was during the period of April-June 2009. But this time, the recorded growth was lesser than both the predictions of the Ministry of Trade and Industry who calculated it to by 1.3% and the analyst’s polls by Bloomberg who expected it would be 1.4%. Even though the MTI further decreased its assumed growth window assessing the present conditions from 1.5%-3.5% to 1.5%-2.5%, still the final outcome did not fall within the same.
Analyzing this unexpected fall from February 2019 and looking into the near future, the MTI said that Singapore’s economic growth is encumbered even more by innumerable uncertainties and uncalculated risks. Even though MTI is hopeful about a rise in Singapore’s economy in the second part of the year, but nowhere near this optimism, Economists like Ang Kai Wei and Kit Wei Zheng had wholly different forecast of the future. They have estimated that in the present scenario if a trade-war erupts in the country, it will further lower Singapore’s economic redemption and is likely to bring about growth which is lower than the lowest mark of assumption.
Selena Ling of OCBC Bank, made a startling revelation; in her opinion, if the economic growth of the country is going to be in and around the 1% mark, then there is no way in which it can catch up with the country’s predicted 2.5%. When the dependence on Singapore’s economic growth was linked to the tensions arising because the chip manufacturers and tech masters have chosen to invest in the China-based company of Huawai, the MTI overlooks it and states that there is a an array of other factors working to influence the country’s industrial and economic sector. According to Mr. Lim, the bigger factor the pioneer factor at work right now is how the tension between United States and China is going to affect the investors’ confidence in business, consumer’s confidence and most importantly this precariousness will hover over the entire global economy for quite some time now. Furthermore, this economic tension has also brought about the decline of US’s euro zone’s economy and a downfall in China’s economy can be expected by 2019. Tracing the progress of the manufacturing sector, there has been a decrease of 0.5% through every year, a huge retreat from the recorded 4.6% growth of the preceding quarter. As a result of the shaky demand of the global semiconductor, the resultant engineering of the electronics have lessened.
Seen from the MTI’s point of view, the growth was eventually initiated by the IT sectors because of the firms’ unmatched demand for IT and electronic solutions; but the brighter side of the story is that this lapse in one area has gone about to strengthen some other sectors of the country that include departments of transportation, health, education, communications and social services. Keeping aside the electronic sector, these sectors grew at a rate of 2.2% in the last year when compared to the steady 0.3%, the outcome of the last quarters; and this positive increment has been possible to be brought about by the combined improvement of all the aforementioned sections.