SINGAPORE'S economy may have ground to a halt in the second quarter, with gross domestic product (GDP) growth almost nil in flash data.
But the Government does not yet expect a full-year recession, according to a statement from Deputy Prime Minister Heng Swee Keat on Friday.
As the dreaded "R-word" buzzes around the market, political leaders weighed in on economic flash data, with three Cabinet ministers taking to Facebook.
Second-quarter GDP looks set to come in flat year on year, with growth of just 0.1 per cent, based on preliminary numbers from April and May.
The economy has now notched its slowest quarterly growth since 2009, and has slowed sharply from the first quarter's 1.1 per cent expansion.
"Not since the global financial crisis has growth been this poor," ANZ Asia research head Khoon Goh said.
Mr Heng, who is also Finance Minister, wrote online: "We are not expecting a full-year recession at this point."
But "the possibility of a real recession is very real", CIMB economist Song Seng Wun maintained, referring to a prospect that Singapore has not faced since 2009. While he still sees the risk of this as low, "it is not that difficult to get a full-year contraction".
Mr Song also raised the dual spectres of unforeseen global events, or a full-blown recession emerging next year, as threats to Mr Heng's outlook.
In the wake of the latest flash data, private economists have trimmed their full-year growth forecasts for 2019 to as low as zero to 1 per cent.
The Ministry of Trade and Industry (MTI), which had initially guided for growth of up to 3.5 per cent, cut its full-year forecast in May to between 1.5 per cent and 2.5 per cent.
But central bank chief Ravi Menon has noted that the official forecast - which was cut on disappointing data from the first three months - was already under review again last month.
The powerhouse manufacturing sector saw its second quarter of year-on-year contraction, widening to 3.8 per cent from 0.4 per cent before.
Construction, which is in just its second quarter of recovery, saw growth ease to 2.2 per cent, from 2.7 per cent, while the services industries' growth was flat at 1.2 per cent.
On a seasonally adjusted, quarterly basis, GDP shrank by 3.4 per cent - falling broadly across manufacturing, construction and services - after 3.8 per cent growth in the first quarter.
Maybank Kim Eng analysts Chua Hak Bin and Lee Ju Ye first raised the fear of a technical recession - two straight quarters of quarter-on-quarter contraction - in a June 26 report.
Sticking to their guns, they now warn that "risk has shifted towards a deeper recession", with more bad news for the labour market if factories and trade-related sectors ramp up layoffs and firms cut back on hiring.
Rob Carnell, chief economist and head of Asia-Pacific research at ING, noted that "the third quarter is usually quite strong" for Singapore's GDP, even though the trade war could eat into pre-holiday electronics output.
"Having said this, recession is a somewhat arbitrary definition," he added, arguing that growth of 0.1 per cent is not "really meaningfully better" than a dip of the same size.
With the road ahead looking rocky, CIMB's Mr Song said that "we cannot avoid a global slowdown - we are at the tail-end of a mature growth cycle".
But Mr Heng told the public: "We are prepared for the cycles the economy will go through. The Government is monitoring the situation closely, and is working with employers and unions to prepare for all scenarios."
While he said that the GDP flash data "reflects the heightened uncertainties and risks in the global economy", Mr Heng added: "We must continue to focus on the medium and long term, even as we tackle the short-term challenges posed by the current economic cycle and help those affected."
Also taking the long view, Minister for Trade and Industry Chan Chun Sing has argued that the present challenges are different from the conditions in the 1997 Asian financial crisis and the global financial crisis of 2008.
Those events involved "a sudden loss of confidence in global financial markets", he said in a Web statement.
"Instead, we are now dealing with longer-term shifts in supply chains and production patterns which will unlikely revert (sic) to the previous norms, even if there is a respite from the short-term trade tensions amongst the major global economies."
Manpower Minister Josephine Teo also stressed that the labour market still has some 60,000 positions open, and "new and better jobs continue to emerge as the economy transforms".
Meanwhile, the depressing advance estimates could yet be revised up, DBS chief economist Taimur Baig suggested, pointing to factors like Chinese manufacturing sentiment.
"We see some signs of stabilisation, perhaps even a rebound in June," he said in a note. Still, he conceded that "policymakers may not, however, take that as a sure sign of a trough" amid global uncertainty.
MTI will release its updated GDP print and outlook by Aug 23.