Trade minister rules out outright recession but says negative growth looms

'We cannot rule out the possibility that the economy will experience some quarters of negative growth'.

Singapore economy expands by 1.8 per cent in Quarter 1
The skyline of the central business district in Singapore Reuters

Singapore's Trade and Industry Minister Lim Hng Kiang has conceded the economy is experiencing "some quarters of negative growth" but ruled out the possibility of the country slipping into an an outright recession.

Minister Lim Hng Kiang said Singapore's H2 gross domestic product could come in lower than the 2.1 percent recorded in the first half. The economy is slated to grow between 1 to 2 percent in the full year, the minister said in parliament.

"Our base line projection is not an outright recession, but we cannot rule out the possibility that the economy will experience some quarters of negative growth on a quarter on quarter basis," Lim said.

He added that the government is prepared to consider introducing a range of contingency measures, after taking stock of the nature and severity of the downturn. The minister called on companies affected by the downturn to dip into the government's SME Working Capital Loan scheme.

Lim said given that Singapore is s a "small open economy" external developments do have an impact on its economy. He said the global economic outlook is likely to remain weak in the near term and investment demand in key advanced economics will be muted.

He said the government will "press on with the efforts to steer (Singapore's) economy to a more sustainable growth path driven by productivity and innovation".

There are still areas of robust growth in the economy, Lim added. "Tourism-related sectors such as accommodation have benefitted from the recovery in tourist arrivals. Growth in "other services industries" and the information & communications sector is also expected to remain resilient, supported by growth in the education, health & social services and IT & information services segments respectively," Lim said.