Singapore’s economy shrinks as US-China row hits global trade ... and it’s set to get worse, analysts say

Gross domestic product in the trade-reliant city state declined an annualised 3.4 per cent in the quarter compared with the first three months of the year. That compared with growth of 3.8 per cent in the first quarter and 0.5 per cent expansion forecast in a Bloomberg survey of economists.

Singapore’s heavy reliance on trade and its complicated integration in regional and global supply chains makes it vulnerable to a slowdown in world growth and tariff wars. Exports have already taken a big hit over the past few months, with shipments plunging in May by the most since early 2013.

“I thought the numbers would be bad, but this is ugly,” said Chua Hak Bin, an economist at Maybank Kim Eng Research in Singapore. “The whiff of a technical recession is real. We thought it might be shallow, but the risks now is that it might be deeper.”

The Singapore dollar fell as much as 0.1 per cent to 1.3588 against the US dollar after the data.

Manufacturing contracted an annualised 6 per cent in the second quarter from the previous three months. Construction declined 7.6 per cent, reversing a 13.3 per cent expansion in the first quarter. The services industry shrank 1.5 per cent in the second quarter.