Asia Economy

Singapore's not going into a recession 'at this point,' trade minister says

Key Points
  • Singapore's economy — often seen as a bellwether for global growth — avoided a technical recession after growing by 0.6% in the third quarter, compared to the previous three months.
  • Asked if Singapore can avoid a recession, Singapore's Minister for Trade and Industry Chan Chun Sing said: "At this point in time, I don't think we are looking at a recession."
  • Chan said the "greatest challenge" in the next 10 to 15 years would be whether the world moves to a more integrated course, or a "more fragmented global trading and production system."
Gantry cranes stand at the Port of Singapore in Singapore, on Friday, July 12, 2019.
Ore Huiying | Bloomberg | Getty Images

Singapore won't be entering a recession for now and despite the risk of a more fragmented world and trade disruptions, the country remains "quietly confident," its minister for trade and industry Chan Chun Sing said Tuesday.

Singapore's economy — often seen as a bellwether for global growth — avoided a technical recession after growing by 0.6% in the third quarter, compared to the previous three months. On a year-on-year basis, Singapore's economy grew 0.1% in the third quarter, below analyst expectations.

Asked if Singapore can avoid a recession, Chan said: "At this point in time, I don't think we are looking at a recession."

"But we are of course cognizant of the larger forces moving in the world. But yet at the same time, we are quietly confident," he told CNBC at the Singapore International Energy Week conference on Tuesday.

The Southeast Asian nation has one of the highest trade-to-GDP ratios in the world. That makes its economy highly sensitive to global trade flows and business cycles.

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Chan said the "greatest challenge" in the next 10 to 15 years would be whether the world moves to a more integrated course, or a "more fragmented global trading and production system."

The U.S. and China have been embroiled in a trade dispute for more than a year, slapping tariffs on billions of dollars worth of each other's goods. It has upended supply chains and hit manufacturing activity in several countries. In Singapore, both goods-producing and services-producing industries have been affected.

The economic super powers have been unable to resolve key sticking points, with the U.S. accusing China of intellectual property theft — which Beijing has denied — and forced tech transfers. The trade dispute has since moved into the tech space, with the U.S. blacklisting Chinese companies and China reportedly looking to wean off American technology.

"If the world bifurcates or fragments ... that would bring in a very different growth trajectory for the entire world," Chan said.

But Singapore can "play to our strengths" amid all the disruptions, he stressed, citing the city-state's long-term stability, intellectual property protection, and pro-business environment.

"I think those are the factors that we offer investors for their long term investment," Chan concluded.

— CNBC's Yen Nee Lee contributed to this report.