Singapore could come off worse in next global downturn

Victor Kang24 Sep 2019

This comes as four of the five factors that had protected the city-state during the Great Financial Crisis have weakened.

Singapore could be far worse than its regional neighbours when the next global downturn hits.

This comes as four of the five factors that had protected the city-state during the Great Financial Crisis have weakened, reported Singapore Business Review citing a Bain report.

“The last global recession has hit Singapore harder than most peers with the change in real GDP,” said Bain.

Singapore’s GDP growth in 2006 stood at about nine percent. But like most regional peers, this declined to around three percent in 2018 on the back of the uncertain macroeconomic environment. The present account balance as a share of GDP also fell to about 18 percent in 2018 from 25 percent in 2006.

Commodities contribution also went down, rendering Singapore more vulnerable to economic shocks.

“Current commodity contribution to GDP is lower than in 2006. Singapore is less impacted as contribution remains relatively low,” noted Bain in the report. “This reduced ability to cushion will be likely further impacted by the already declining commodity prices. This decline in prices is true too for Singapore’s top commodities.”

Singapore has also become increasingly dependent on China – the growth rates of which have sharply declined. The city-state’s exports to the world’s second-biggest economy steadily grew from two percent in 1990 to 10 percent in 2006 to 12 percent last year.

In a separate report, Moody’s listed Singapore as the third most vulnerable country in the Asia Pacific to Chinese trade decline – behind Hong Kong and Mongolia.

Private sector debt as a percentage of GDP also exceeded developed market levels to reach 169 percent in 2018 from 112 percent in 2006.

Comparatively, the OECD average only stands at 156 percent.

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email


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