Singapore will not see a recession this year despite a sluggish economy, although uncertainty remains for 2024, Prime Minister Lee Hsien Loong said on Thursday (Sep 7).
Lee was giving his take on the outlook for ASEAN economies amid China’s downturn, and how this might affect Singapore while speaking to Singapore media after the Association of Southeast Asian Nations (ASEAN) Summit in Jakarta
Comparing the 1 percent growth forecast for Singapore this year to the expected growth of 4 percent for ASEAN, Lee said Singapore’s growth is a little bit slower “because we are more at a developed economy rate of growth”.
Noting that a “good year” for the Republic would be about 2.5 percent and a “very, very good year” at 3 percent growth, the prime minister said Singapore’s post-COVID economic rebound — when it recorded a gross domestic product (GDP) growth of 7.6 percent in 2021 — was “transient” and not sustainable.
He added: “So for us, 1 percent is slow. But it’s not a recession. And we’ll have to see how things go in Europe, in America, and also in China.
“And I think all in, I think there’s some sluggishness in the economy, we don’t think that we are going to a recession this year. But what happens next year, we’re not sure yet.”
Mr Lee also spoke about the economy in his National Day Rally speech in August when he said Singapore was expecting positive economic growth this year and would “hopefully” avoid a recession.
In findings released on Wednesday, private sector economists cut their forecast for Singapore’s economic growth this year to 1 percent, down from an earlier projection in June of 1.4 percent.
A slowdown in the external growth environment was cited as the top downside risk, on top of inflationary pressures and slowing growth in China.
But there seems to be better news for 2024, with economists projecting GDP to expand by 2.5 percent that year.
Earlier in August, Singapore slightly cut its economic outlook for 2023 — to come in between 0.5 to 1.5 percent, narrowing from the previous 0.5 to 2.5 percent range — after it narrowly averted a recession in the second quarter, with weak global demand roiling its trade-reliant economy.
Singapore’s GDP expanded a seasonally-adjusted 0.1 percent quarter-on-quarter from April to June, after a -0.4 percent contraction in the first quarter of 2023. An economy enters a technical recession when it sees negative growth for two consecutive quarters.
-CNA
