In the first six months of the year, expectations of synchronised global growth did not quite materialise. Now, trade fears are weighing on Singapore’s growth outlook. But economists see a silver lining in domestic services. What can investors expect for the rest of 2018?

SINGAPORE (June 25): Global economic growth has been uneven in 1H2018. Though economic activity has picked up in the US, the same cannot be said for Europe and certain emerging markets (EM). As a result, major central banks have diverged in their respective monetary policy decisions. This is fuelling volatility in financial markets. Meanwhile, trade tensions among the world’s biggest economies have investors worried.

On June 15, the US Trade Representative released a list of products imported from China that will be subject to additional tariffs. The USTR says it will impose an additional duty of 25% on about US$50 billion ($68 billion) worth of Chinese imports containing industrially significant technologies. They include technologies related to China’s “Made in China 2025” industrial policy. The tariffs are expected to kick in on July 6. China says it will retaliate “forcefully” against the US decision.

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