The expression “canary in a coal mine” describes an advanced warning of some danger. Because of its location as a trade and financial hub, Singapore’s data and policy announcements are often regarded as early indicators of the global economic cycle. Recent releases indicate that we are in a fragile situation. Firstly, the preliminary estimate of Q1 GDP growth showed a deceleration on a yearly basis (+1.3% y/y in Q1 after +1.9% y/y in Q4 2018) due to a contraction in the manufacturing sector (-1.9% y/y). Secondly, monthly indicators suggest that activity remained weak in March. Non-oil domestic exports contracted by -11.7% y/y (after +4.8% in February). Looking ahead, we expect economic growth to come in at +2.3% in full year 2019 (after +3.2% in 2018) thanks to a pick-up in the remainder of the year. Business surveys point to a modest uptick. The manufacturing PMI rose to 50.8 points in March (from 50.4 in February) helped by a rise in domestic and overseas’ new orders. Meanwhile, dovish signals are coming from the Central Bank. The MAS announced that it will keep its policy unchanged for the time being, citing lower than expected inflation and a weaker growth outlook.
