Diversification helped Singapore avoid recession in 2019: Chan

Singapore

THREE sectors in the services industry helped Singapore escape recession in 2019, and while the government has a cautiously optimistic outlook, uncertainties remain in the global economy, Minister for Trade and Industry Chan Chun Sing said.

Replying to a question from Non-Constituency MP Leon Perera in Parliament on Monday, Mr Chan said the banking and finance, professional services and infocomm technology sectors were what held up an economy that was largely "under the water".

"This is a design feature of our economy - we have diversified our economy," Mr Chan told the House, adding that this is how Singapore has to continue navigating as diversification brings resilience and stability that allow for job creation.

Flash data last week showed that Singapore's economy grew 0.7 per cent in 2019, and the government is expecting growth to pick up between 0.5 per cent and 2.5 per cent this year.

Even though the government is cautiously optimistic, uncertainties remain in the global economy, the biggest of which is the relationship between the United States and China, Mr Chan said in a separate response to Bishan-Toa Payoh GRC MP Saktiandi Supaat.

Mr Chan said he is encouraged by the impending signing of a Phase One trade deal between Washington and Beijing, adding that he believes the significance of the deal goes beyond the lines of agreement but is a basis for both sides to establish strategic trust.

However, he noted that their challenges go beyond trade numbers and are structural in nature. The US presidential election this year could also throw up "surprises", he added.

Another uncertainty is Brexit, although Mr Chan believes the immediate impact is likely to be limited. This is because the United Kingdom will be functionally treated as a European Union member-state until at least Dec 31. But this may change depending on what the UK Parliament decides in the coming weeks, he said.

Mr Chan added that these uncertainties, alongside political unrest in other parts of the world, are not unrelated but "manifestations of deeper unhappiness over the inequitable distribution of gains from globalisation", which is also why the multilateral trading system is under significant stress.

However, he said it is not just "doom and gloom" as the digital economy presents a major opportunity for Singapore.

Mr Chan outlined the government's three strategies to grow Singapore's economy. First, to strengthen Singapore's fundamentals to help the Republic stand out, secondly, to help companies and workers internationalise, and thirdly, to pursue new growth opportunities in new industry niche areas such as additive manufacturing and robotics.