Singapore grows 0.7-pct in 2019, as Sri Lanka slows to below 3.0-pct

In this file photo taken on August 19, 2019 Cargo ships berth at Tanjong Pagar and Pulau Brani container terminals in Singapore.

ECONOMYNEXT – Singapore’s economy, which is highly exposed to international trade had grown just 0.7 percent in 2019, the city state’ government has said, compared to projected growth of less than 3.0 percent for Sri Lanka.

AFP, a news agency quoted Singapore’s trade ministry as saying the economy expanded by 0.8 percent year-on-year in the fourth quarter to December.

This puts the overall growth for 2019 at just 0.7 percent, down from 3.2 percent expansion in 2018.

Sri Lanka’s economy was hit by a currency collapse in 2018 and also Easter Sunday attacks. The central bank is expecting growth of around 2.8 percent in 2019.

The government has slashed VAT in a risky move giving effect to an election promise. Going by past trends, Sri Lanka economy about 18 months after a currency collapse, analysts have said.

Singapore, which is highly exposed to international trade has traditionally been the first among Asia’s economies to be affected during a downturn, and the country narrowly escaped tipping into recession in the third quarter.

“This marks the worst growth performance for Singapore since the global financial crisis,” DBS Bank economist Irvin Seah said in a note, referring to the downturn that began in late 2008 and lasted well into 2009.

He added, however, that “despite the lacklustre growth performance, the economy is slowly getting out of the woods” as there are “emerging signs of bottoming in the external environment”.

“Barring any unforeseen negative shocks, growth momentum is expected to pick up gradually in the coming quarters,” he said.

Last year’s growth was weighed down by manufacturing, a key economic pillar, which contracted 1.5 percent last year due to output declines in main exports such as electronics.

Singapore is due to unveil its national budget for this year in February, with observers closely watching for signs of general elections widely expected to be held within months.

Prime Minister Lee Hsien Loong said in a New Year’s Day message that the budget will contain support for businesses and workers, as well as measures to help households cope with living costs. (Colombo/Jan02/2020)