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Singapore teeters on edge of recession after industrial output nosedives
- Economists now expect the city state’s economy to have contracted in the first two quarters of this year – enough to count as a technical recession
- It raises the prospect of a downgrade to Singapore’s full-year growth forecast, with weaknesses in manufacturing and trade the likely culprits
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Singapore’s industrial output has fallen the most since November 2019, raising the risk of the economy slipping into a technical recession.
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Factory production declined 10.8 per cent from a year earlier in May, worse than the 7.3 per cent drop predicted in a Bloomberg survey, marking the eighth straight month of contraction.
Output of the electronics industry, which accounts for the largest weight in the city state’s export-driven manufacturing sector, plunged 23 per cent year on year, with semiconductors seeing the cluster’s worst drop.
Economists, including from Barclays Plc and Maybank Research, now expect Singapore’s economy to contract in the second quarter compared to the previous three months, enough to count as a technical recession after the first quarter’s 0.4 per cent decline.
Earlier, Singapore had downgraded non-oil export trade growth this year to a drop of between 8 per cent and 10 per cent due to worse-than-expected performance in manufacturing.
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