Coronavirus and oil price war rattle Southeast Asian economies, flatten Singapore and Thailand growth forecasts

Economists polled by the Monetary Authority of Singapore in February slashed their Singapore growth outlook by more than half

Separately, DBS Bank economists lowered growth estimates for five other Asean economies, citing travel bans and supply chain disruptions

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People admire the Singapore skyline from the observatory of the Supertree Grove at Gardens by the Bay. Photo: EPA

Published: 1:03pm, 11 Mar 2020Updated: 8:38pm, 11 Mar 2020

Private sector economists surveyed by Singapore’s central bank slashed their economic growth forecasts for the city state this year by more than half to 0.6 per cent – down from the 1.5 per cent forecast in December’s survey – citing the threat posed by the coronavirus outbreak.

All 21 respondents to the survey highlighted an escalation of the Covid-19 disease caused by the virus as a risk, with nearly 90 per cent citing it as the No 1 risk. The median forecast of economists and analysts, done quarterly, showed expectations that Singapore’s GDP would contract 0.8 per cent in the first quarter, compared to the same period last year.

A day earlier, economists from Singapore’s largest bank DBS also lowered growth estimates for five other economies within the Association of Southeast Asian Nations (Asean) – Vietnam, Malaysia, Indonesia, Thailand and the Philippines – citing travel bans and supply chain disruptions within China that would drag down the performance of export-dependent economies.

China accounted for 14 per cent of Asean’s total exports and more than one-fifth of the region’s imports last year.

Thailand, which is heavily reliant on tourism especially from China, was thought to be the most affected as economists took one percentage point off the GDP growth forecast for this year.

In the MAS survey in December, economists were preoccupied with the effects of the US-China trade war which sent shock waves through Asia’s export-heavy economies last year as the countries’ bilateral relations fractured.