After peaking in preceding year, 2019 outlook expected to be muted with bright spots in Asia
- Notwithstanding a muted global outlook, optimism – catalysed by consumption and sound economic fundamentals – lies in ASEAN and the larger Asia region.
- Panel discussion on how local businesses could continue to expand overseas despite multiple headwinds. nternationalisation, technology adoption and manpower development are key levers for growth
31 January 2019 [Singapore] - With the peaking of the global growth cycle in 2018, this year is expected to bring lower growth and greater downside risks for businesses. However, consumption is expected to be the primary growth and opportunity driver, according to Mr David Hoffman, Senior Vice President, The Conference Board of Asia.
Speaking at the Singapore Business Federation’s (SBF) Seminar on Business Outlook for 2019, Mr Hoffman added that the high-flying US economy of 2018 is anticipated to soften in 2019 and over the medium term, due to tailwinds from fiscal stimulus, dampening business and consumer confidence and US-China trade tensions.
Risks in Europe, on the other hand, are expected to intensify due to weakening global trade, rising energy and labor costs, weaker corporate profits, higher debt servicing costs and other downside factors.
Themed “Opportunities amidst Uncertainties: Where should businesses look?”, the event drew more than 100 participants and insights from notable speakers on issues ranging from Brexit and interest rate hikes to US-China trade tensions and the outlook for ASEAN. With regard to Asia, Mr Hoffman anticipates growth to moderate in 2019, primarily arising from slowing in China and India. Notwithstanding a muted outlook, consumption remains a bright spot in Asia, while ASEAN is expected to grow at a healthy pace with support by wage gains and strong labour markets.
According to the World Bank, East Asia and the Pacific remain as one of the world’s fastestgrowing developing regions with a projected growth of 6% in 2019, although growth in China is expected to slow as domestic and external rebalancing continues. Worries over US-China trade relations are expected to continue to weigh on Asian market sentiment and economic growth. Rising protectionist sentiments and political leadership changes in Thailand, Indonesia and Malaysia have also heightened concerns for the stability of the region.
However, Mr Song Seng Wun, Economist at CIMB Private Banking, noted, “While there are risks over the horizon, this region, especially ASEAN is still set to remain among the world’s strongest growing regions as resilient demand offsets the negative impact of slowing exports”. The panel discussion “Tackling the Regional Trade Tension and Safeguarding the Prosperity of Global Economy for Singapore with China” addressed how local businesses could deal with the current trade tensions in their overseas expansion plans.
SBF also shared the key findings of its annual SBF National Business Survey 2018/2019.
Mr Ho Meng Kit, CEO SBF, said: “Given the on-going trade tensions and the possibility of a gradual economic slowdown, it is even more important that our companies stay nimble and be quick to take advantage of opportunities that may arise.”
“Businesses should continue to be on the lookout for opportunities in the region, and at the same time continue to innovate and transform through upskilling their employees and investments in technology. In our recent SBF National Business Survey findings, it is heartening to note that despite on-going uncertainties, businesses in Singapore are still pursuing innovation to keep pace with the fast-changing economy,” he added.
Other speakers and panelists at the seminar include:
- Mr Abhineet Kaul, Senior Director, Public Sector & Government, Frost & Sullivan
- Ms Wang Yan, Deputy General Manager, Bank of China;
- Mr Jonathan Lim, Executive Director, Global Business Development, UOB;
- Mr Yang Yamei, General Manager, China Taiping Insurance Singapore; and
- Mr Chong Kok Keong, CEO of GeTS Global Pte Ltd, and ACEO of CrimsonLogic Pte Ltd.
1. World Bank’s Global Economic Prospects (Jan 2019)