Singapore’s economy, a closely watched barometer for the rest of Asia’s export-driven countries, grew only 0.7% last year as the US-China trade war hammered global markets.
The city-state has traditionally been the first among Asia’s economies to be affected during a downturn, and the country narrowly escaped tipping into recession in the third quarter.
The trade ministry said in a statement Thursday that based on advance estimates, the economy expanded by 0.8% year-on-year in the fourth quarter to December.
This puts the overall growth for 2019 at only 0.7%, down from 3.2% expansion in 2018.
“This marks the worst growth performance for Singapore since the global financial crisis,” DBS Bank economist Irvin Seah said in a note, referring to the downturn that began in late 2008 and lasted well into 2009.
He added, however, that “despite the lackluster growth performance, the economy is slowly getting out of the woods” as there are “emerging signs of bottoming in the external environment.”
“Barring any unforeseen negative shocks, growth momentum is expected to pick up gradually in the coming quarters,” he said.
Last year’s growth was weighed down by manufacturing, a key economic pillar, which contracted 1.5% last year due to output declines in main exports such as electronics.
President Donald Trump’s announcement Tuesday that the US and China will sign a partial new trade agreement in the middle of next month has stoked optimism about improved global trade this year.
Singapore is due to unveil its national budget for this year in February, with observers closely watching for signs of general elections widely expected to be held within months.
Prime Minister Lee Hsien Loong said in a New Year’s Day message that the budget will contain support for businesses and workers, as well as measures to help households cope with living costs.