The Singaporean economy contracted to its slowest yet in a decade, the latest data indicated, with the expansion rate only at 0.7 percent in Q4 2019. The numbers came despite official estimates on Thursday indicating a slight uptick in economic growth.
According to Channel News Asia, data from the Ministry of Trade and Industry (MTI) suggested that for the last quarter of 2019, gross domestic product (GDP) expanded by 0.8 percent.
If based on a quarter-on-quarter seasonally adjusted for annual data range, the Singaporean economy expanded only at 0.1 percent, a sharp contrast from economists' projection of 0.4 percent.
The MTI explained that the decline in Singapore's economic growth was due to slower output in chemical products, electronics, transport engineering segments, and other sectors.
Weaker exports also pulled down the flash estimate numbers as the China-U.S. trade war dragged on. Singapore is trading with both economic giants and a downturn in trading affected the city-state's economy.
Despite slower growth last year, some economists are still confident that Singapore will bounce back this year, especially with notable growth in several segments such as the construction sector.
In Q4 2019, the construction sector expanded by 2.1 percent year-on-year, albeit slower than the expansion rates from the previous quarter. The services sector also grew by 1.4 percent.
Economic experts are also expecting more stimulus from the central bank sometime early this year as the government prepares for its fiscal budget.
Earlier this week, Singaporean Prime Minister Lee Hsien Long noted that the 2020 budget will focus on helping bolster businesses. Support will be rolled out to assist businesses in building greater productivity, he said in his New Year Message 2020.
Aside from boosting business sentiment, Lee said the budget will also help ease the burdens of households. To achieve this, the government will help improve social security stems for the elderly, the vulnerable, and the poor.
The education system will also be reformed along the way, Lee said, as well as home-buying for first-timers in the sector. Healthcare facilities will also be improved to help provide better service to patients.
Finally, Lee said the transportation network will also be developed this year. His comments have been taken as a sign that negotiations for the Malaysia-Singapore third link may be progressing as Malaysian Prime Minister Mahathir Mohamad has been calling on further action from both sides for the third bridge to be constructed.
Lee then encouraged his countrymen to stay "connected to the world." He pointed out that the city-state has been benefitting largely from globalization. "A Singapore turned inwards cannot survive," he said.
