According to a news article by Singapore Business Review (SBR) quoting Singapore’s national bank DBS, the latest GDP figure will decline 5% quarter-to-quarter which is the worst ever since the financial crisis in 2009. Led by the poor economic performance of the manufacturing sector and especially the industrial production, Singapore is poised to face its first recession soon in July. The official GDP report from the Government will only be announced after the National Day on Tuesday (August 11).
In yesterday’s National Day Message, Prime Minister Lee Hsien Loong did not mention about GDP growth at all for the first time in his 12 years of National Day Message. The PM will likely call for an election next month in September to avoid the economic crash his government has led Singapore into despite his ultra-liberal immigration and economic policies.
You may view DBS’s quote from SBR below:
“Marginal upward revision in the services sector is expected to be offset by even deeper contraction in the manufacturing sector. Industrial production figures for June had come in worse than expected. Industrial output fell by 4.4% YoY and 3.3% MoM sa. It’s an utterly poor outcome and this is way lower than the -1.8% YoY assumed in the recent advance GDP estimates for 2Q15.
Services sector growth figures tend to get underestimated in every preliminary estimate. So, expect this figure to be revised upward to 3.3% YoY, up from the advance projection of 3.0% YoY. However, a domestic labour crunch due to the restructuring effort has been weighing down on the performance of the sector. In fact, even with the upward revision, services growth has moderated significantly from 4.2% YoY in the previous quarter.
Ultimately, external demand has been weak amidst the dicey global economic conditions. Absent a recovery in the global economy, manufacturing performance will continue to languish and weigh down on overall GDP growth outlook. Indeed, downside risks are certainly piling up. Against the backdrop of a second quarter GDP contraction, risk of a technical recession, albeit still low, should not be dismissed entirely.”