Welcoming 2019 : Seeing bright spots even as uncertainty abounds

HOPE smiles from the threshold of the year to come, whispering, "It will be happier". As people from all quarters looked in recent days to a brand new year, this line from a play by Alfred Lord Tennyson probably captures the anticipation of only the steadfastly optimistic (and/or quietly defiant).

After all, as many a pundit and seer will have us know, the disruptions, turmoil and turbulence seen across the world in 2018 - in global politics, macro-economics and in industry sectors - will continue in 2019, if not come to a head altogether with dire consequences. The chief economist of the World Trade Organization, Robert Koopman, for instance, didn't mince his words when giving his prognosis of the year's economic outlook. "It's almost like a death from a thousand cuts," he said last week, citing leading indicators that "continue to weaken" and serving notice that the WTO's earlier forecasts for 2019 global trade growth - already downgraded in September - could yet be cut again soon. Even as US-China trade tensions continue to simmer amid an uncertain truce, the bigger risks lay in the impact on business sentiment, said Mr Koopman, pointing to early signs of business investment being hit and consumers in both the US and China beginning to hold back on purchases. US Federal Reserve chairman Jerome Powell last week also pointed to investor and business fears over trade conflicts and global growth in 2019. Business corporations, meanwhile, have warned of being hit by tariffs-related costs, rising borrowing costs, cooling global demand, and overall slowing economic growth. These big downside risks add up to the uncertainty that has - increasingly and without exception - characterised each and every year over the past decade and more.

For countries on the sidelines of the global battleground, much of the year's outlook is shaped by the global macro-economic climate and other exogenous factors. Tackling and managing the downside risks is, for Singapore, very much par for the course - and indeed yet another instance when its resilience would be exercised, perhaps its creativity developed too. The official forecast of 2019 reflects a fairly sanguine reading of the external climate and prospects, with economic growth seen as high as 3.5 per cent - roughly maintaining the 2018 pace - but possibly easing to just 1.5 per cent if more of the negative risks materialise. Indeed, Singapore must stand prepared for unexpected pickups in the headwinds - if, for instance, global financial tightening results in disorderly capital outflows from emerging economies. Volatility may yet return to rule, and rue, the markets. But there are bright spots. Notably and encouragingly, while the manufacturing and externally-oriented services sectors may see slower growth, several other service industries are expected to fare well on the back of robust business demand for IT and digital solutions.