Singapore’s manufacturers cut costs as they prepare for a prolonged US-China trade war
- Economists predict recession next year if US-China trade war persists
- They also expect monetary easing by the central bank and government incentives to boost growth
Last year, Singaporean chemicals factory boss Erman Tan took his employees on a cruise to the Malaysian island of Penang. This year, Tan says the best he can offer is to watch a video of the trip.
Singapore’s economy is expected to grow at its slowest pace in a decade this year, and some experts are predicting a recession in 2020, as the US-China trade war looks set to hit the export-reliant city state harder than others in Southeast Asia.
This has prompted some economists to raise bets on the central bank easing monetary policy at its next meeting in October, or even out of cycle, especially if the US Federal Reserve were to cut interest rates next month.
There is also speculation that the government could provide incentives to boost growth, but businesses like Tan’s do not expect fiscal or monetary policy to be enough to arrest an economic decline that is mostly a result of a global slowdown.
“Many times you rely on yourself,” said Tan, chief executive of Asia Polyurethane Manufacturing, which is cutting costs as customers in China hold back orders.