SINGAPORE (July 19): Consecutive releases of depressing economic data have dampened sentiment and raised the spectre of Singapore’s falling into a recession. Policymakers and economists have recalculated their growth projections and the results are grim: The economy is forecast to expand as little as zero to 1% this year.
Yet, a downturn should come as no surprise. The protracted, tit-for-tat trade war between the US and China, as well as lingering global economic sluggishness, is bound to take its toll on Singapore’s small, very open and trade-dependent economy.
According to World Bank data, Singapore has one of the highest trade-to-GDP ratios in the world. The ratio is an indicator of how important international trade is to an economy. In 2018, Singapore’s trade was 326% of its GDP, second after Hong Kong’s 376%. For further comparisons, Vietnam’s was 188% of its GDP and Thailand’s, 123%. The European Union’s was 86%, the US’ was 27% and China’s was 38%.