Monetary Authority of Singapore (MAS) logo signage on the building at entrance (Photo by mimisim from Shutterstock.com)

Maybank says SG to enter recession while MAS reports its net profit jumped to $19.2B

According to a Bloomberg report yesterday (26 Jun), Maybank Kim Eng Research said that Singapore’s economy will probably experience a “shallow technical recession” in the third quarter this year, as the global trade outlook worsens.

The escalating U.S.-China trade conflict is weighing on Singapore’s export-reliant economy, Maybank noted. It expects the Singapore’s economy to grow only 1.3% this year, lower than the government’s official forecast range of 1.5% to 2.5%.

“Disruptions to the supply chain will likely intensify as the trade war broadens to tech and the U.S. imposes export controls on more Chinese tech firms,” Maybank said.

Manufacturing in Singapore has already contracted more than expected in May. The outlook for electronics, which make up 27% of factory output, is particularly weak since U.S. export controls may hit chipmakers like Broadcom Inc. and Intel Corp., which operate in Singapore, Maybank said.

At the press conference during the release of MAS’s annual 2018/19 report today (27 Jun), MAS Managing Director Ravi Menon told reporters that the government is reviewing its growth forecast range for the year and can’t yet say whether it’ll be revised to even lower than the present 1.5%-2.5% estimate.

Meanwhile, according to its annual report released today, MAS said that it made a net profit of S$19.2 billion for the year ended March, due to “better investment returns” and “currency effects”.

This figure, net of a S$3.9 billion contribution to the Consolidated Fund, is more than three times (almost 4 times) higher than last year’s net profit of S$5.3 billion (‘MAS net profit more than triples to S$19.2 billion on investment gains, currency effects‘).