Singapore’s central bank this week delivered a sobering economic assessment amid sluggish near-term growth prospects, ongoing inflationary challenges and predictions the economy is already in a technical recession. The Monetary Authority of Singapore (MAS) also emphasized that despite revising its 2023 headline inflation forecast downward, its battle against rising consumer prices is far from won.
The city-state’s trade-reliant economy faces mounting headwinds as external demand weakens amid a global economic slowdown. Earlier this year, there were certain hopes that a post-pandemic economic rebound in China would lift Singapore above its tepid current growth forecast of between 0.5% to 2.5%.
Those hopes have since faltered as China’s economic recovery loses steam, with fewer and fewer independent economists predicting Beijing will hit its 5% economic growth target for 2023. Singapore’s economy contracted in the first quarter, falling to -0.4% from the previous quarter’s growth of just 0.1%.
Economists believe that sluggish trade and industrial performance, driven partly by China’s faltering recovery, likely dragged Singapore into a technical recession in the second quarter, preliminary estimates for which are due later this month.
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Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.
