This comes as global conditions worsened, “partly due to the escalation in the US-China trade conflict in recent months”.
The ministry noted that the escalation of the trade conflict “could severely dent global business and consumer confidence, with adverse implications on global trade and global economic growth”.
Other downside risks cited by MTI include the slowdown in China, Brexit, the uncertainties in Hong Kong and Japan-South Korea trade dispute.
In Q2 2019, Singapore’s economy contracted by 3.3 percent, down from the 3.8 percent growth registered in the first quarter.
On an annual basis, the economy marginally expanded by 0.1 percent, down from 1.1 percent in the previous quarter.
Manufacturing as well as wholesale & retail trade emerged as the worst performing sectors as they contracted 3.1 percent and 3.2 percent year-on-year, respectively, in Q2.
The information & communications sector, on the other hand, grew 4.1 percent year-on-year, while the construction sector increased 2.9 percent year-on-year.
The transportation & storage sector and the accommodation & food services sector also grew by 2.2 percent and 0.9 percent, respectively.
But while the Singapore economy is expected to face strong headwinds for the rest of the year, the ministry pointed to several bright spots in the economy.
“Within the manufacturing sector, the aerospace and food & beverage manufacturing segments are expected to continue to do well given firm demand conditions,” it said.
“Among the services sectors, the growth of the information & communications and finance & insurance sectors is projected to remain healthy, bolstered by sustained demand for enterprise IT solutions and increased demand for payment processing services respectively. Meanwhile, the education, health & social services segment’s growth is likely to be resilient, supported by the ramp-up of operations in healthcare facilities.”
MTI also expects the recovery in the construction sector to continue.