After rounding off the decade with the year from hell, Singapore’s traders are hoping the tentative truce in the US-China trade war may signal a better 12 months ahead.
The export-dependent economy grew by just 0.7 per cent in 2019, while its shipments contracted by 9.2 per cent – both the worst figures since 2009 when the island state was pommelled by the global financial crisis.
“While we hope for a better year in 2020, there are certain things we have to deal with – we’re not sure how things will pan out between the US and China,” said Darric Teo, director at freight forwarding company ASL Solutions.
“Things are very volatile, then recently there has been the problem with Iran. Oil prices will come into effect and I think for many manufacturing firms the demand is not there, and in logistics we pretty much depend on all these trade flows around the world.”
The last month of 2019 and the early weeks of January have, though, shown some signs of recovery. December’s non-oil exports were up 2.4 per cent on a year earlier, while industrial production – a gauge of manufacturing in Singapore – shrank by 0.7 per cent, data released by the Singapore government on Friday showed, much improved from minus 9.6 per cent in November.
Nonetheless, those involved in and around Singapore Port are conscious of the volatility that lies ahead and the fragile nature of the phase one trade deal between China and the United States which stalled an escalation in tariffs between the world’s two largest economies.
Singapore’s export to gross domestic product (GDP) ratio is higher than any other country except tiny Luxembourg. The biggest buyers of Singaporean goods, meanwhile, are Hong Kong and China – two economies which have also toiled over the past 12 months.