Monetary Authority of Singapore
Monetary Authority of Singapore Reuters

Economists have sharply cut their forecasts for Singapore's economic growth in 2019, citing trade tensions and a slowing China as the top risks to the financial hub, a central bank survey showed on Wednesday.

Singapore's gross domestic product is expected to increase 0.6% this year, according to the median forecast of 23 economists surveyed by the Monetary Authority of Singapore (MAS) - down from 2.1% in the last MAS survey in June.

Growth of 0.6% would be just inside the upper half of the government's newly-downgraded forecast range. The Ministry of Trade and Industry cut its range last month to zero to 1%, from its previous 1.5%-2.5% projection.

Singapore has been hit hard by the Sino-U.S. trade war, which has disrupted world supply chains in a blow to business investment and corporate profits.

Final second quarter Singapore GDP data, reported on Aug. 13, showed a 3.3% on-quarter contraction on a seasonally-adjusted annualized basis.

That was a slight decline from the government's advance estimate but deeper than a 2.9% fall predicted in a Reuters poll and a sharp contrast to the robust 3.8% first quarter expansion.

In the new MAS survey, economists slashed forecasts for most key macroeconomic indicators but raised their expectations for the finance, insurance and private consumption sectors.

The survey predicted Singapore's economy would grow 0.3% in the third quarter on an annual basis, up from the 0.1% on-year expansion seen in the second quarter.

For 2020, full-year growth of 1.6% is expected, the survey showed.

Singapore's advance estimate for third quarter GDP growth and MAS semiannual monetary policy statement will be released on the same day in October. The date has not been announced, but will be no later than Oct. 14.