Singapore yesterday slashed its full-year economic growth forecast, as global conditions were seen worsening and data confirmed the slowest growth rate in a decade amid mounting fears of recession in the city-state.

The government cut its forecast range for GDP to between zero and 1 percent from its previous projection of 1.5 to 2.5 percent.

“GDP growth in many of Singapore’s key final demand markets in the second half of 2019 is expected to slow from, or remain similar to, that recorded in the first half,” the Singaporean Ministry of Trade and Industry said in a statement.

The ministry flagged a host of growing economic risks, including Hong Kong’s political situation, the Japan-South Korea trade dispute, the Sino-US tariff war, slowing growth in China and Brexit.

Final second-quarter GDP data showed a 3.3 percent quarter-on-quarter contraction on a seasonally adjusted annualized basis.

That was slightly smaller than the 3.4 percent decline seen in the government’s advance estimate, but deeper than a 2.9 percent fall predicted in a Reuters poll and a sharp contrast to the robust 3.8 percent first-quarter expansion, which was driven by brisk construction activity.

The data also confirmed annual GDP expanded 0.1 percent in April-June from a year earlier, its slowest rate in a decade, and lower than poll expectations of 0.2 percent and the first quarter’s 1.1 percent.

A central bank official said after the data release that it was not considering an off-cycle policy meeting. Its next scheduled semi-annual meeting is in October, when it is widely expected to ease policy.

The city-state yesterday cut its full-year forecast for non-oil domestic exports to a 9 percent contraction from an 8 percent fall previously. That comes after a 26.9 percent sequential drop in electronics exports in the second quarter.

“With trade tensions between the US-China unlikely to abate anytime soon, we expect exports and trade-related services to push the economy into technical recession in Q3,” said Sian Fenner, lead Asia economist at Oxford Economics.

New Zealand, India and Thailand all cut interest rates last week, signaling major concerns about the outlook for economic growth. Last month, the US Federal Reserve cut interest rates for the first time since 2008.

Singaporean Prime Minister Lee Hsien Loong (李顯龍) said in an annual speech last week that the government stood ready to stimulate the economy.

“It feels like the storm is coming if you look at the whole macroeconomic fundamentals softening,” OCBC Bank (華僑銀行) head of treasury and strategy Selena Ling (林秀心) said.

“All the downside risks are piling up on one side,” Ling added, pointing to the myriad of global risks flagged in the ministry’s statement.

A faltering economy is expected to crimp growth at Singapore’s three local listed banks, which have so far benefited from improved margins, steady interest rates and loan growth.