Last year was a better-than-expected year for the Singapore economy, but given the uncertainties that lie ahead, projections for 2019 are more circumspect, and for good reason. In his new year message, Prime Minister Lee Hsien Loong said the economy grew by 3.3 per cent last year, slightly below the 3.6 per cent growth achieved in 2017, but closer to the upper end of the 3 to 3.5 per cent growth forecast by the Ministry of Trade and Industry (MTI). For 2019, the MTI is predicting growth to come in between 1.5 and 3.5 per cent. The wider-than-usual range suggests that the ministry is building in a substantial margin to allow for downside risk. A survey by the Monetary Authority of Singapore of 23 private economists who track the Singapore economy and which was released last month found that they project growth for 2019 at 2.6 per cent - almost at the mid-point of MTI's forecast.

The top risk cited by economists is trade tensions, particularly between the United States and China. These tensions are on hold, under a truce that is supposed to last until March. But as of now, there is no telling what will happen thereafter. US President Donald Trump has hinted that a major trade deal is in the works, but its shape and scope are unclear. It is also unlikely that the complex and wide-ranging trade issues between the US and China can be resolved easily or soon. In any event, China's economy is slowing: Growth in the second and third quarters of 2018 was lower than in the first. Most economists expect the slowdown will continue into this year, citing a fall in export orders in the second half of 2018 and sharp declines in consumption tax revenues in October and November. A slowing Chinese economy means lower import demand, which will impact not just the Singapore economy but also regional supply chains.