Singapore’s small and open economy relies heavily on trade, but external demand has been weakening amid a slowdown
Diarytimes Media Network, Shimla
On a year-on-year basis, the economy remains in positive territory with growth of 0.4 per cent year-on-year between January and March, albeit much lower than the 2.1 per cent growth seen in the previous quarter.
A technical recession refers to a situation where an economy experiences two consecutive quarters of negative economic growth, as measured by the gross domestic product (GDP). In other words, it is a period of declining economic activity characterized by a contraction in GDP.
During a technical recession, various economic indicators such as employment, investment, consumer spending, and business profits may also decline. This can lead to reduced business activity, increased unemployment, decreased consumer confidence, and a general slowdown in economic progress.
Governments and central banks closely monitor economic indicators to identify the occurrence of a recession. They often implement measures to stimulate the economy, such as reducing interest rates, increasing government spending, or implementing fiscal policies to encourage investment and consumer spending.
It’s important to note that a technical recession is a specific definition based on GDP growth. However, the impact and severity of a recession can vary widely depending on several factors, including the underlying causes, the strength of the economy before the recession, and the effectiveness of government policies implemented in response.
Singapore faces a “high risk” of slipping into a technical recession in the second quarter as challenges in the external environment persist, some private-sector economists said on Thursday (May 25).
These comments came after official data for the first quarter showed the economy declined 0.4 per cent from the previous three-month period on a quarter-on-quarter seasonally adjusted basis.
This marks a reversal from the 0.1 per cent growth in the fourth quarter of 2022, leaving the economy at risk of a technical recession which is defined as two consecutive quarter-on-quarter contractions.
The last time Singapore entered a technical recession was in the second quarter of 2020 when the COVID-19 pandemic cooled global growth. Domestically, the roll-out of the “circuit breaker” halted almost all economic activities for two months.
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