Singapore just avoided a full-fledged recession, since Q3 GDP growth was +0.6% q/q after a negative figure in Q2. No recession yet, but rather a boom-bust profile that ends in a flat-lining growth cycle: The y/y growth figure was stable in Q3 compared to Q2 (+0.1%). Construction has helped to soften the landing of Singaporean growth, since both the public and private construction output contraction had softened (after strong output losses in Q2) and should now be back to growth, which in turn shows that fiscal buffers that are used in a countercyclical way can smooth the cycle. Otherwise, supply-side indicators remain quite weak: The manufacturing PMI was below 50 for the fifth straight month in September and the electronics PMI also exhibited an index below 50 (49.1 in September), suggesting a weak momentum for both international trade and electronics that is set to persist in the short-run. As a result, GDP growth should follow a stagnation path at +0.4% for both 2019 & 2020, after +3.1% in 2018.
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Weekly Export Risk Outlook 16 October 2019