Photo of Singapore MBS from AFP

In the latest GDP report released by the Ministry of Trade and Industry (MTI) today (Nov 24), Singapore posted a -2% contraction in the 3rd quarter and lowered the 2016’s GDP forecast to 1%-1.5% from 1%-2%. Compared year-to-year, Singapore’s economy grew only 1.1% but is projected to get worse pending the 4th quarter result. The country will officially go into a recession if it post a second negative quarterly result for the 4th quarter of 2016.

Blaming the decline to “sluggish global economic conditions”, MTI said that full-year growth will be “marginally weaker” than 2015:

“Global economic conditions have remained sluggish, with full-year growth for 2016 likely to come in marginally weaker than in 2015…Growth was weighed down primarily by the weak performance of the business services and wholesale & retail trade sectors. For the rest of the year, Singapore’s GDP growth is expected to remain modest. Sectors such as electronics, information & communications and “other services industries” are likely to continue to support growth, while the wholesale trade and finance & insurance sectors could continue to face external headwinds.”

However there is no mention why GDP quarterly results of other countries are not as “sluggish” as MTI painted. Below are the recently-released quarter result in Asia:

Philippines +7.1%
Vietnam +7.0%
Indonesia +5.02%
Malaysia +4.3%
Taiwan +2.06%
Japan +2.2%
New Zealand +0.9%
South Korea +0.7%
Hongkong +0.6%

The MTI’s Permanent Secretary said that Q4 result will be positive and “should avoid a technical recession”.

Commenting on the recent announcement by US President Donald Trump that US will leave the Trans-Pacific Pact (TPP), MTI said that Singapore will continue to push forward working out a TPP without the US. However, Japan Prime Minister Shinzo Abe said that Japan will withdraw too if US leaves TPP. This leaves only 5 players out of the original 12 – Australia, New Zealand, Mexico, Singapore and Malaysia. Only Singapore has secured domestic approval while the others are facing domestic opposition to TPP.