Malaysian businesses to feel the pinch from Singapore recession

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Households in the island nation are poised to save more and spend less on non-essential goods and services, affecting Malaysia’s tourism and other sectors. FMTNews Economy Malaysia Singapore Tourism

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PETALING JAYA: An economist has warned that Singapore’s slump into a recession will have wide-ranging consequences for Malaysia, the republic’s second largest trading partner after China.

Juita told FMT firms in Singapore that were currently “shifting into survival mode” were likely to downsize their operations.“As downsizing takes place, investments into Malaysia will be decreased drastically,” she said.Singapore on Tuesday announced that its economy shrank an unprecedented 41.2% in Q2 following Q1’s 3.3% decline. The figure is based on advance estimates by the country’s trade and industry ministry.

A large portion of investments in the state come from Singapore. In a press interview last month, Johor Menteri Besar Hasni Mohammad said investments from Singapore rose 51% to RM1.68 billion last year. “We are hoping that the number of tourists from Singapore will gradually increase after the reopening of the border from Aug 10,” Goh said. “However, the recession will definitely be standing in the way.”

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